Govt, House Approve Prabowo’s Macroeconomic Assumptions

The government and House Commission XI have agreed on the macroeconomic projections for the 2025 state budget, though matters such as budget deficit remain on the table.

Maria Elena

10 Jun 2024 - 17.34
A-
A+
Govt, House Approve Prabowo’s Macroeconomic Assumptions

President-elect for the 2024-2029 period Prabowo Subianto (middle)./Bisnis

Bisnis, JAKARTA—The government and House Commission XI, which oversees financial affairs, have agreed on the macroeconomic projections to serve as the foundation for the 2025 state budget. 

This agreement was reached in a working meeting attended by Finance Minister Sri Mulyani Indrawati, National Development Planning Minister Suharso Monoarfa, Bank Indonesia (BI) Governor Perry Warjiyo, and Financial Services Authority (OJK)’s Board of Commissioners Chairman Mahendra Siregar.
 "Agreed? If so, I'll strike [the gavel]," said Kahar Muzakir, House Commission XI Chairman, on Thursday (6/6/2024).
 Among the matters agreed upon for 2025, economic growth was targeted at 5.1 to 5.5 percent, inflation between 1.5 and 3.5 percent, and the rupiah exchange rate projected to be IDR15,300–15,900 to the dollar.
 Furthermore, the 10-year government bond interest rate is set between 6.9 and 7.2 percent, slightly adjusted from the government’s previous proposal of 6.9–7.3 percent. They also agreed on development targets, including a 7.0–8.0 percent poverty rate for 2025. 
 The meeting also discussed budget cuts and deficit targets for Prabowo Subianto's incoming government. Previously, the government, through the 2025 macroeconomic framework and fiscal policies (KEM-PPKF), had set a budget deficit target of 2.45 to 2.82 percent of GDP. However, Minister Suharso requested the Finance Minister reduce the target to 1.5–1.8 percent of GDP.
 With a lower deficit, Suharso said the government would try to readjust spending while striving for higher state revenue. For instance, budget cuts could be made to the central government’s spending, pegged at around 10.92–11.17 percent of GDP.
 “There’s a lot, there’s central spending, there’s some we can do spacing slightly, and if we can do 1 percent [deficit reduction], that’s around, based on our 2025 GDP estimates of IDR23,000 trillion. That’s about IDR230 trillion, so it’s not too much,” he said after meeting House Commission XI on Wednesday (6/5/2024).



 Suharso also pointed out that the budget for subsidies could be cut.
“We have many types of subsidies; exclusion or inclusion errors, for instance, must be fixed. If we had fixed that long ago, we at Bappenas [National Development Planning Agency] say the amount [of budget] we could have saved is astounding,” he said.
 Suharso added that reducing the deficit will create more fiscal space for the new administration, enabling president-elect Prabowo’s programs to be accommodated immediately into the revised state budget.
 
FISCAL SPACE
 House Commission XI Deputy Chair Dolfie Othniel Frederic Palit requested the government, through the finance minister, to design a lower deficit target for Prabowo’s first year in office, arguing that the new administration should not kick off with a large debt burden.
“For the 2025 state budget, make a low deficit as a start; don’t start high,” he said.
 Dolfie noted that the incoming government would inherit significant debt from the incumbent administration and advised policymakers not to add to the burden.

Cek Berita dan Artikel yang lain di Google News dan WA Channel
Editor: Yusuf Waluyo Jati
Jelajahi peluang bisnis terpercaya dengan berlangganan
Temukan keleluasaan dan keuntungan maksimal dengan pilihan paket berlangganan eksklusif ini
BERLANGGANAN SEKARANG
Tidak Memerlukan Komitmen, Batalkan Kapan Saja
Penawaran terbatas. Ini adalah penawaran untuk Langganan Akses Digital Dasar. Metode pembayaran Anda secara otomatis akan ditagih di muka setiap empat minggu. Anda akan dikenai tarif penawaran perkenalan setiap empat minggu untuk periode perkenalan selama satu tahun, dan setelah itu akan dikenakan tarif standar setiap empat minggu hingga Anda membatalkan. Semua langganan diperpanjang secara otomatis. Anda bisa membatalkannya kapan saja. Pembatalan mulai berlaku pada awal siklus penagihan Anda berikutnya. Langganan Akses Digital Dasar tidak termasuk edisi. Pembatasan dan pajak lain mungkin berlaku. Penawaran dan harga dapat berubah tanpa pemberitahuan.
BIG MEDIA
Jalan K.H. Mas Mansyur No. 12AKaret Tengsin - Jakarta Pusat 10220
© Copyright 2024, Hak Cipta Dilindungi Undang - Undang.
BIG MEDIA
Jalan K.H. Mas Mansyur No. 12AKaret Tengsin - Jakarta Pusat 10220
© Copyright 2024, Hak Cipta Dilindungi Undang - Undang.