Indonesia to widen deficit to 2.3-2.6% for 2017 State Budget

4

Photo Wamenkeu

JAKARTA (TheInsiderStories) – The Indonesian government plans to widen deficit of the 2017 State Budget deficit to 2.3- 2.6 percent of Gross Domestic Product (GDP) from from a target of 2.15 percent this year, a senior official at the Finance Ministry said.

The projected 2017 deficit assumes a weaker exchange rate for the rupiah and a stronger economic growth rate.

Deputy Finance Minister Mardiasmo said Indonesia’s economic growth is predicted to reach around 5.5 to 5.9 percent in 2017 and inflation at around 4 percent, while the rupiah may trade at 13,700-14,200 per US dollar on average for the year, while Indonesia Crude Price (ICP) is forecast at $35 to $45 a barrel.

The government is currently drafting the 2017 State Budget which will be submitted to the People’s Representative Council (DPR), commonly in August for approval.

Mardiasmo said the State Budget for 2017 will be submitted at the time US economy and European economy show signs of improvement. However, the government needs to be cautious as well as because boosting economic growth and state budget through debts could cause bubble in the economy. The other risks the government needs to take notice is the slowdown of Chinese economy, low commodity prices and changing of the Fed rates, which is expected to be raised in June this year.

In domestic front, there are positive signs, including speed up of government expenditures and infrastructure development programs. The fundamental of Indonesia’s economy is relatively strong as seen by controlled inflation. State Budget deficit is still kept at around 2.2 percent, while trade balance is still showing surplus.

“We hope this positive economic growth momentum will continue in a sustainable way, fair and better quality. Our GINI ratio has declined from 0.41 to 0.40, showing the gap between the “haves” and “have not” is narrowing therefore, the government’s expenditures will give better impact on the country’s economy,” he said.

Following is the highlights of the 2017 State Budget

  • Fiscal Deficit 2.3 – 2.6%
  • GDP : 5.5 – 5.9%
  • Inflation : 4.0 plus minus 1%
  • Exchange Rate : Rp 13,700 – 14,200
  • Interest Rate of SPN 1 month : 5.5 – 6.5%
  • Oil Price :  $35-35 a barrel
  • Oil Lifting :   740 – 750 MBOPD
  • Gas Lifting :  1,050 – 1,150 MMBTU

Estimated Realized Economic Assumptions in 2016:

  • GDP : 5.5 to 5.9%
  • Inflation : 4.45%
  • Exchange Rate : Rp 13,276 – 13,527
  • Interest Rate of SPN 1 Month : 5.9%
  • Oil Price :     $30.2 a barrel
  • Oil Lifting :  785.2 MBOPD
  • Gas Lifting :   1,234.6 MMBTU

APBN 2016 Economic Assumptions:

  • GDP         :  5.3%
  • Inflation :  4.7%
  • Exchange Rate : Rp 13,900
  • Interest Rate of SPN 1 month : 5.5%
  • Oil Price :   $50 a barrel
  • Oil Lifting :   830 MBOPD
  • Gas Lifting  :  1,155 MMBTU

(*)

 

The post Indonesia to widen deficit to 2.3-2.6% for 2017 State Budget appeared first on The Insider Stories.

Source: The Insiderstories
Indonesia to widen deficit to 2.3-2.6% for 2017 State Budget

You might also like More from author

Comments are closed, but trackbacks and pingbacks are open.