The Suspension Of The State Budget Report Threatens Indonesia's Fiscal Credibility

Minister of Finance Sri Mulyani (Photo: dock. VOI)

JAKARTA - The State Revenue and Expenditure Budget (APBN) is the main foundation in state financial management that reflects government fiscal policy.

In order to maintain public trust and economic credibility, the Ministry of Finance regularly issues our State Budget monthly reports as a form of transparency and accountability.

However, until now, the Ministry of Finance has not released our State Budget report for January 2025. This phenomenon raises many questions regarding the state's financial condition, the effectiveness of fiscal policy, and its impact on economic stability and financial markets.

Jakarta Veterans UPN Public Policy Expert Achmad Nur Hidayat said this would certainly raise a big question mark because, in recent years, our State Budget report has almost always been released on time as a form of government openness in managing state finances.

"If it is just a technical factor that causes delays, why has there been no clarity regarding when the report will be published?", he told VOI, Friday, March 7.

According to him, the lack of transparency in APBN management can have a serious impact on the national economy and market confidence, investors, and international financial institutions that depend on fiscal data published by the government to assess the economic conditions of a country.

"If our APBN report continues to be delayed, trust in Indonesia's fiscal credibility could be disrupted, which in the end could trigger various negative impacts," he explained.

According to him, one of the main impacts is increasing volatility in financial markets, and investors who do not get certainty about the state's fiscal conditions tend to be more careful in investing.

Achmad said this could cause foreign capital flows to come out or capital outflows that could potentially weaken the rupiah exchange rate against the US dollar.

According to him, in the long term, the weakening of the rupiah can increase import costs and worsen the current account deficit.

"The postponement of the release of our APBN can also affect the bond market. The issuance of Government Securities (SBN) is very dependent on investor perceptions of the government's fiscal health," he said.

Achmad also said that if investors began to doubt the government's ability to manage the state budget, demand for government bonds could decrease, which in the end increased yields or bond yields.

He explained that this increase in yield has the potential to increase the burden on government debt, especially in financing the budget deficit.

In addition, Achmad said that the delay in the release of our State Budget could raise some serious concerns, namely first, the lack of transparency has the potential to trigger negative speculation in the market, because without clear information, rumors and assumptions could develop, harming perceptions of the Indonesian economy.

Then, the government's credibility in managing state finances can be questioned, considering that Indonesia is known to have good fiscal management. If transparency is disrupted, this can damage the attractiveness of investment.

Furthermore, third, the uncertainty of fiscal policy could disrupt private sector planning, because many companies rely on APBN data in business strategies because without these data, companies tend to be conservative, which could hinder economic growth.

Finally, Achmad expressed that public trust in the government could decrease, because the public has the right to know the management of state finances, especially in economic conditions that are full of challenges.

"If the government does not immediately release our State Budget report, then the public may begin to question whether anything is being hidden," he added.

In this situation, transparency is the key to maintaining economic stability and market confidence.

Therefore, Achmad said that the Ministry of Finance must immediately provide clarification regarding the delay in the release of our State Budget and ensure that state financial information remains available to the public.

According to him, delaying the release will only worsen perceptions and increase negative speculation.

"In order to maintain Indonesia's fiscal credibility, the Ministry of Finance must immediately release our State Budget report and ensure that the principle of transparency remains upheld in the management of state finances. Public trust and markets should not be sacrificed solely for political interests or administrative reasons," he said.