"The current macroeconomic reality of 2013 is not in line with the 2013 State Budget assumptions and thus adjustments are needed, also related to the 2014 Draft Budget," said Finance Minister Chatib Basri in Jakarta (28/8). For the macroeconomic assumptions of 2013, the biggest revision occurred in the pace of inflation. In the 2013 State Budget, inflation was set at 7.2 percent. Now, the target has been revised to 9.2 percent, a significant upward revision.

Factors that give rise to these inflationary pressures in 2013 include the uneffective national policies regarding the provision of domestic supplies (especially foodstuffs such as onions, beef and chili) and subsidized fuel price adjustments in late-June.

Another assumption that needed a sharp correction was the rupiah exchange rate. In the 2013 state budget, the exchange rate was set at IDR 9,600 per US dollar but due to the weakening trend of the currency its target has been revised to IDR 10,200 per US dollar. However, Chatib Basri acknowledges that this target is difficult to achieve considering the rupiah is expected to continue its weakening trend in the months ahead. The average realized exchange rate as of 26 August 2013 stood at IDR 9,852 per US dollar and IDR 10,841 on the average spot market.

The outlook for economic growth in 2013 has been lowered from 6.3 percent in the 2013 State Budget to 5.9 percent. Of the seven macroeconomic assumptions of 2013, only the 3-month state treasury securities rate (SPN) has not been revised.

    State Budget
         2013
 Realization
 per 31 July
 Outlook
GDP Growth
annual percent change
          6.3         5.9      5.9
Inflation
annual percent change
          7.2         8.6      9.2
Exchange Rate
IDR/USD
        9,600       9,852   10,200
Treasury Bills Interest Rate
3-month, percent
          5.0         4.2      5.0
Indonesian Crude Oil
USD $ per barrel
         108        105     105
Oil Lifting
thousand barrels per day
         840        829     834
Natural Gas Lifting
barrel of oil equivalent/day
        1,240       1204    1207

 

  State Budget
   Draft 2014
    Outlook
GDP Growth
annual percent change
        6.4     5.8 - 6.1
Inflation
annual percent change
        4.5     4.5 - 5.5
Exchange Rate
IDR/USD
      9,750 10,000-10,500
Treasury Bills Interest Rate
3-month, percent
        5.5         5.5
Indonesian Crude Oil
USD $ per barrel
       106        106
Oil Lifting
thousand barrels per day
       870        870
Natural Gas Lifting
barrel of oil equivalent/day
      1,240      1,240

Revision of economic growth in 2013 from 6.3 percent to 5.9 percent was needed due to the country's higher inflation rate, a slowdown in the global economy and continued weak world trade. These conditions harm investments and export growth.

GDP Growth (%) 2013 per Category:

  State Budget
   Draft 2013
 Outlook
Household Consumption
        5.0      5.1
Government Consumption
        6.7      3.4
Gross Fixed Capital Formation
        6.9      5.3
Export         6.6      4.8
Import         6.7      1.8

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