Ministries And Institutions Ask For Added Budget, Economists Say Fiscal Space Is Getting Narrower

Head of Bank Permata economist Josua Pardede. (Photo: Doc. ANTARA)

JAKARTA - Head of Bank Permata economist Josua Pardede assesses that there will be several impacts on the 2025 State Budget (APBN) if there is an additional Indicative Ceiling for all Ministries/Institutions (K/L) if approved.

One of them is the fiscal space for programs from the new president and vice president, which will be narrow in the future.

"In general, during the transitional period of government, sufficient fiscal space is needed to accommodate the elected presidential and vice presidential programs that will only be inaugurated in October, including through the APBN-P in early 2025," he explained to VOI, Thursday, June 13.

According to Josua, especially now that the discussion on the priorities for the development of a new government through the National Medium-Term Development Plan (RPJMN) is also still in the discussion stage and will only be ratified in early 2025.

Josua said, in addition to causing a limited fiscal space, the addition of the indicative ceiling also has the potential to increase the fiscal deficit.

"If all proposed budget increases are approved and without the reallocation of ceilings from other ministries and institutions, it is certain that the total budget will increase and without an increase in income, the state budget deficit will widen in 2025," he said.

However, Josua assessed that the increase in the budget must also see the urgency of the program offered.

If indeed the program is important for Indonesia's development, then the increase can be taught.

Meanwhile, regarding the condition of the state budget in the future, Josua assessed that more efforts were needed from the government to be able to increase state revenues to be able to offset future expenses, including through the search for alternative sources of funding and tax reform.