Get ready! 2023 State Budget Called to Face a 40-Year Challenge Cycle

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - Minister of Finance, Sri Mulyani, said that the current global situation has forced all parties to be more aware of emerging dynamics.

According to her, a series of changes will occur starting next year, such as interest rates creeping up, the US dollar exchange rate strengthening, to inflation hitting double digits in developed countries.

"Therefore, the 2023 State Budget Bill (RUU) is designed in such a way that it becomes a government statement in maintaining the policy in the midst of shocks and instability that will not necessarily occur in 40 years", she said via her Instagram page @smindrawati on Wednesday, 28 September.

The Minister of Finance added that the government itself projects that next year's state budget revenue will reach IDR 2,463 trillion. She said this figure is a relatively safe estimate if you look at the latest economic conditions and projections for the future.

She explained that commodity price fluctuations support this assumption because of the significant impact on taxes, export duties, and non-tax state income (PNBP).

"However, we will still prepare a mechanism to secure state revenues if commodity prices are not as high as assumed", she said.

Meanwhile, for the state expenditure side, it is planned to reach IDR 3,061.2 trillion which will focus on improving the quality of human resources, supporting election preparation, accelerating IKN development, and completing various strategic infrastructure projects that are beneficial to society and the economy.

"For transfers to the regions, IDR 814.7 trillion is allocated which will be used to support priority sectors that will be implemented by the regions", she said.

Based on this design, the budget deficit is claimed to be reduced to IDR 598.2 trillion, or equivalent to 2.84 percent of gross domestic product (GDP).

"This is sufficient to maintain the momentum of economic recovery to strengthen and support various development agendas optimally", she said.

Furthermore, the state treasurer explained that financing to cover the deficit originating from debt would be pushed down further through investment financing that empowers the role of SOEs and Public Service Agencies (BLU).

Several lines that are being targeted include infrastructure development, increasing access to financing for MSMEs, and financing for housing that is livable and affordable for low-income people (MBR).

"I appreciate the government and the DPR who have an understanding so that the State Budget is designed optimistically but remains vigilant. Fiscal consolidation in 2023 was also agreed, a very anticipatory and strategic decision", concluded Minister of Finance, Sri Mulyani.