The State Budget Shocked! Sri Mulyani Reveals External Factors That Caused It

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani said that the current state budget fiscal instrument is experiencing quite strong shocks, mainly from external factors. This situation, said the Minister of Finance, cannot be separated from the increase in the prices of several important commodities which have an impact on the Indonesian economy.

For this reason, it is very important to revitalize the state budget after the constitution allows the budget deficit to be widened to above 5 percent.

"We will continue to maintain the health of the state budget from stronger shocks from abroad, so that it can protect our people and our economy," she said, quoted on Thursday, July 28.

The Minister of Finance added that the hard work of the State Budget through state spending is evidence of fiscal instruments in supporting the economic recovery program and maintaining the impact of uncertainty.

It was stated that the outlook for the 2022 State Budget deficit fell from 4.85 percent of GDP (gross domestic product) to 3.92 percent of GDP.

"The role of the state budget as a shock absorber needs to be maintained so that it functions optimally, but still pays attention to health and credibility," she said.

Furthermore, the state treasurer explained that global risks, especially inflation and the potential for recession in developed countries, must be watched out for. She said global volatility had an impact on domestic inflationary pressures and the Indonesian bond market, although the impact was limited, supported by strong domestic liquidity.

“In general, the domestic economy is still resilient, but we need to be vigilant in the midst of global turmoil due to the potential for recession and the phenomenon of stagflation. Indonesia's economic fundamentals are supported by a healthy external sector, relatively more moderate inflationary pressure and strong fiscal performance," she stressed.

As previously reported, the realization of the State Budget (APBN) until the first semester of 2022 managed to record a surplus of IDR 73.6 trillion, which came from state revenues of IDR 1.317.2 trillion compared to spending of IDR 1.243.6 trillion.

"The state budget will remain an incredibly important instrument to become a shock absorber, improve economic performance, protect our people, and that comes from tax revenues, from commodity revenues, from customs and excise, from non-tax state revenues (PNBP)," concluded Minister of Finance Sri Mulyani.