Indonesia's economic growth target in the draft 2016 State Budget is revised down to 5.3 percent (y/y) from an earlier target of 5.5 percent (y/y). The revision is proposed in order to make the government state budget more realistic given the sluggish global economic growth outlook, particularly on slowing economic growth in China.

Both government revenue and spending are proposed to increase in 2016. This may be overly ambitious as this year's targets (government spending at IDR 2,096 trillion and revenue at IDR 1,823 trillion) will most likely not be achieved due to weak tax income and sluggish government spending (caused by red tape and weak coordination between the central and local governments).

The rupiah is projected at IDR 13,900 per US dollar by Indonesia's central bank (Bank Indonesia) as the currency remains under pressure mainly because of looming higher US interest rates.

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia

Recently, Indonesian Finance Minister Bambang Brodjonegoro said the government's 2015 budget deficit is expected to remain below 2.5 percent of GDP despite weak tax revenue. The government only managed to collect IDR 686 trillion (approx. USD $50.8 billion) in tax revenue (excluding excise and export-import duties), or 53 percent of the government's full-year 2015 target (IDR 1,294 trillion), as of 5 October 2015. In the revised 2015 State Budget the government's budget deficit was set at 1.9 percent of GDP.

Indonesian Macroeconomic Assumptions:

   State Budget
   Draft 2016
Government Spending
in trillion IDR
Government Revenue
in trillion IDR
Budget Deficit
percent of GDP
GDP Growth
annual percent change
annual percent change
Exchange Rate
Treasury Bills Interest Rate
3-month, percent
Crude Oil
USD $ per barrel
Oil Lifting
thousand barrels per day
Natural Gas Lifting
barrel of oil equivalent/day