Airlangga Pede RI Can Maintain Deficit Below 3 Percent

Coordinating Minister for the Economy Airlangga Hartarto (Photo: dock. VOI)

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto is optimistic that Indonesia can continue to maintain its budget deficit below three percent.

With the draft deficit, he hopes to be an encouragement for all parties to remain optimistic about the current and future national economic conditions.

"This is only an alarm if we look at the budget deficit in EU countries, which averages 5-7 percent. The alarm sounds in Europe, not in Indonesia, Indonesia is still below three percent," said Airlangga quoting Antara.

The government has proposed a budget deficit target for the 2025 State Revenue and Expenditure Budget (APBN) in the range of 2.45-2.82 percent to anticipate next year's debt interest payments which are expected to increase due to the influence of global interest rates and pressure on the United States dollar.

Airlangga also said that the European Union Central Bank had also reminded its member countries to maintain a budget deficit rate of below three percent.

"You can see that the countries of Germany, France, Italy, are (deficit) between 5-7 percent, and Indonesia is below three percent, so (we) don't need to panic. They have received warnings from the Central Bank of the EU, that EU countries must participate like Asian countries," he said.

In addition to the ability to maintain Indonesia's economic fundamentals to remain strong is the most important thing, Airlangga also believes that the government's economic policy next year will still be in line with the current policies.

Then, Indonesia's trade balance in May 2024 recorded a surplus of 2.93 billion US dollars and was able to continue the surplus trend for 49 consecutive months.

Despite being induced by the oil and gas sector deficit, the trade balance surplus is supported by a surplus in the non-oil and gas sector of US$4.26 billion.

Indonesia's increase in non-oil and gas exports in May 2024 compared to April 2024 was followed by increased export value to most major destination countries such as China, the United States, and Japan.

In addition, Indonesia's exports to ASEAN and the EU have also increased.

"In addition to the trade side, we have a surplus, Indonesia's economic growth is relatively high at 5.11 percent, then low inflation at 2.8 percent, then also from relatively high competitiveness. Indonesia's competitiveness ranking has increased by 7 levels in 2024, the highest in the last 6 years. The 2024 IMD World Competitiveness Ranking has recorded that Indonesia occupies the 27th position out of 67 countries, where in 2023 Indonesia was in 34th position. So, fundamentally the Consumer Confidence Index is also good," he explained.

Even though the fundamental economic condition is still stable, according to him, the government is still maintaining regional treasury factors and encouraging investment inflows.

"We also encourage foreign exchange export results, and we also ask entrepreneurs whose exports still have foreign exchange to be included in the country," he said.