Facing Global Dynamics, Sri Mulyani Reveals Automatic Adjustmet Can Strengthen The State Budget

Minister of Finance Sri Mulyani. (Photo: Doc. ANTARA)

Minister of Finance Sri Mulyani Indrawati emphasized the importance of the Automatic Adjustment policy in dealing with global and national dynamics.

"Automatic Adjustment is useful for increasing the resilience of the state budget in dealing with various global and national dynamics," he said at a hearing on the dispute over General Election Results (PHPU) or the 2024 presidential election, Friday, April 5, 2024.

Sri Mulyani said that the APBN as an important flagship instrument must be maintained so that it remains healthy, credible and sustainable. So the implementation APBN must be managed dynamically in order to remain credible and effectively maintain economic stability and protect the community and support the sustainable development process.

According to Sri Mulyani, dynamic APBN management includes adjustments such as refocusing spending, or even cutting spending, such as when facing the shock of the COVID-19 pandemic.

A lighter adjustment is made by Automatically Adjustment of 5 percent of ministry/institutional expenditures (K/L) to encourage the sharpening of K/L spending priorities without sacrificing the K/L priority achievement target.

This is regulated in Law Number 19 of 2023 concerning the 2024 State Budget Article 28 paragraph 1 letter e and its explanation.

On the other hand, Sri Mulyani conveyed that the implementation and management of the APBN is always faced with economic challenges that can change very dynamically.

"This challenge can be triggered by the increasing geopolitical tension which has an impact on commodity price volatility (ICP), high inflationary pressures and rising interest rates (higher for longer) which result in pressure on exchange rates and a slowdown in economic growth," he explained.

As is known, the government has again implemented an automatic adjustment or backup policy of Ministries/Institutions (KL) which is temporarily blocked at the K/L spending ceiling in order to deal with global economic uncertainty conditions and geopolitical turmoil.

This policy is contained in the Letter of the Minister of Finance Number S-182/MK.02/2023. The Automatic Adjustment policy for K/L expenditure for the 2024 fiscal year is set at IDR 50.14 trillion.