Sri Mulyani Fears A Series Of Downside Risk For The 2024 Economy

Minister of Finance Sri Mulyani (Photo: Capture the screen of Indonesia's UOB Youtube)

Minister of Finance (Menkeu) Sri Mulyani said that the assumption of economic growth of 5.2 percent in 2024 had considered a number of aspects and were set relevant.

He conveyed this when representing the government to provide a response to the general view of the DPR faction on the State Budget Bill for Fiscal Year 2024.

"In principle, the government agrees with the view of all factions that the assumption of growth must be realistic and credible," he said at the Senayan Parliament Complex, Jakarta, Tuesday, August 29.

The Minister of Finance said that the determination of the growth target was largely influenced by the world's economic projections.

"National economic prospects cannot be separated from global dynamics," he said.

The state treasurer explained that various risks that must be anticipated and watched out for include the increasing condition of geopolitical fragmentation. Then, the weakening of the economy in China, relatively high inflation, and strict interest rates and liquidity.

"This will create various risks downwards (downside risk) for the economy," he stressed.

On the other hand, there is also a potential risk that comes from climate change. The Minister of Finance said, this is a threat to all countries.

"Global growth in 2024 is believed to be stagnant compared to the 2023 outlook, which is at the 3 percent level," he added.

The Minister of Finance added that consumption as the main supporter of growth is expected to be stable towards strengthening. The tone of optimism is supported by the lower inflation rate, increased job opportunities, increased salaries of ASN and retirees, as well as the positive impact of elections and elections.

"Investments are expected to continue to increase, especially those related to downstreaming of minerals or agricultural products, and the completion of National Strategic Projects (PSN) including IKN," he said.

As previously reported by VOI, President Joko Widodo has officially submitted the 2024 State Budget Bill along with the Financial Note at the plenary session on August 16. After being offered by the government, the DPR then gave an outlook on the country's financial plan.

The following is the draft 2024 State Budget submitted by the government to the DPR:

- Economic Growth 5.3 percent

- 2.8 percent inflation

- The rupiah exchange rate is IDR 15,000 per US dollar

- State securities interest rate 10 years 6.7 percent

- Indonesian crude oil (ICP) price 80 US dollars per barrel

- Oil lifting 625,000 barrels per day

- Gas lifting of 1.03 million barrels of oil equivalent per day

- State revenue of IDR 2,781.3 trillion

- State expenditure of IDR 3,304.1 trillion

- A budget deficit of 2.29 percent of GDP (equivalent to IDR 522.8 trillion)

- Open unemployment rate 5.0 percent to 5.7 percent

- poverty rate 6.5 percent to 7.5 percent

- Gini ratio 0.374 to 0.377

- Human Development Index 73.99 to 74.02

- Farmer's Exchange Rate (NTP) 105-108

- Exchange of Fishermen (NTN) 107-110.