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Today's Headlines State Budget

  • Inefficient Use of Indonesia's State Budget; Fake Villages & Local Public Officials’ High Travel Expenses

    Inefficient Use of Indonesia's State Budget; Fake Villages & Local Public Officials’ High Travel Expenses

    It is assumed by many that the Indonesian government does not make efficient use of the annual state budgets. This is also the reason why Indonesian President Joko Widodo stated recently that one of his key ambitions for the next five years is to make more efficient use of the state budget (“each rupiah of the state budget needs to be used productively”).

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  • 2019 State Budget Indonesia: Realistic & Rising Focus on Social Spending

    2019 State Budget Indonesia: Realistic & Rising Focus on Social Spending

    There are a couple of interesting points when studying the government's proposed 2019 State Budget (that was unveiled by Indonesian President Joko Widodo on 16 August 2018). Firstly, and this is a usual phenomenon when legislative and presidential elections are around the corner, the proposed budget is characterized by a high degree of "populism". Secondly, the macroeconomic assumptions of the government seem much more realistic than usual.

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  • Sri Mulyani Indrawati Updates House on Indonesia's 2019 State Budget

    Sri Mulyani Indrawati Updates House on Indonesia's 2019 State Budget

    In a speech in front of the House of Representatives (DPR) Indonesian Finance Minister Sri Mulyani Indrawati said the government targets an economic growth rate in the range of 5.4 - 5.8 percent year-on-year (y/y) for 2019. She said this range is a realistic one. Moreover, growth should be inclusive and equal, meaning all people across the nation should see an increase in their welfare. The government will give special focus on the acceleration of growth in eastern Indonesia, border areas, the outermost areas and underdeveloped regions.

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  • Positive & Negative Consequences of Rising Crude Oil Prices

    Positive & Negative Consequences of Rising Crude Oil Prices

    The Indonesian government emphasizes that the higher-than-estimated crude oil price will not destabilize the 2018 state budget. While the government set its Indonesian Crude Price (ICP) at USD $48 per barrel in the 2018 state budget, West Texas Intermediate (WTI) and Brent have already surpassed the USD $60 per barrel level, significantly higher than the assumption of the Indonesian government and therefore triggering some concern over rising energy subsidies.

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  • Rising Crude Oil Prices Cause Surging Energy Subsidy Bill

    Rising Crude Oil Prices Cause Surging Energy Subsidy Bill

    The government of Indonesia needs to keep spending on energy subsidies under control. Looking at the latest data, released by the Finance Ministry on Wednesday (03/01), the government spent IDR 7.4 trillion (approx. USD $573 million) more on energy subsidies (fuel, LPN and electricity) throughout 2017 than it had targeted in the (revised) 2017 state budget.

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  • Economy & Politics Indonesia: Widodo Proposes 2018 State Budget

    Economy & Politics Indonesia: Widodo Proposes 2018 State Budget

    Traditionally, the Indonesian President reveals the government's proposal for next year's state budget one day ahead of the Independence Day celebrations. This time, President Joko Widodo announced a rather ambitious target in terms of economic growth. The central government proposes the GDP growth target figure for 2018 at 5.4 percent year-on-year (y/y). The budget proposal requires approval from the House of Representatives (DPR).

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  • Finding a Realistic Tax to GDP Ratio for Indonesia's 2018 Budget

    Finding a Realistic Tax to GDP Ratio for Indonesia's 2018 Budget

    According to Ken Dwijugiasteadi, Taxation Director General at Indonesia's Finance Ministry, a tax-to-GDP ratio at 11 percent would be realistic for Indonesia's 2018 state budget (but would still require big efforts from the government). In a plenary session of Indonesia's House of Representatives (DPR) earlier this week, regarding the 2018 state budget proposals, some called for a sharp increase in the tax-to-GDP ratio to 13 percent. However, considering the expected tax revenue growth, this ratio would be highly unrealistic.

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  • Infrastructure Budget Indonesia Rises in 2017 State Budget

    Infrastructure Budget Indonesia Rises in 2017 State Budget

    In the 2017 State Budget the Indonesian government allocated IDR 387.3 trillion (approx. USD $29.8 billion) for infrastructure development, up from IDR 317.1 trillion in the 2016 budget. Since Joko Widodo became Indonesian President in 2014 the infrastructure budget of Indonesia has been raised rapidly, showing that Widodo kept his pledge and is serious about constructing roads, bridges, airports, harbors, and railways in an effort to enhance connectivity in Southeast Asia's largest economy, reduce logistics costs and enforce the multiplier effect.

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  • Indonesia's Parliament Approves Government's 2017 State Budget

    Indonesia's Parliament Approves Government's 2017 State Budget

    Indonesia's House of Representatives (DPR) approved the central government's 2017 State Budget (APBN 2017) in a plenary session on Wednesday (26/10). This budget is considered realistic with the economic growth target set at 5.1 percent (y/y), government spending at IDR 2,080.5 trillion (approx. USD $160 billion), government revenue at IDR 1,750.3 trillion (approx. USD $135 billion), and the budget deficit at 2.41 percent of gross domestic product (GDP).

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Latest Columns State Budget

  • Indonesian Government Wants to Increase Fuel Subsidy Spending in 2013

    Although Indonesia’s government stresses the need to relieve pressure on the state budget (by raising the price of subsidized fuel next month), it plans to allocate an additional IDR 16.1 trillion (USD $1.65 billion) to this year’s fuel subsidy budget. The additional allocation, which covers fuel, LPG and vegetable fuels, will raise government expenditure on fuel subsidies to IDR 209.9 trillion (USD $21.50 billion) from the IDR 193.8 trillion drafted in the original 2013 state budget (APBN 2013). Total energy subsidies will grow to IDR 309.9 trillion this year.

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  • The Ongoing Quest for the Reduction in Indonesia's Fuel Subsidy

    Fuel Price Hike Indonesia - Indonesia Investments - Richard van der Schaar

    The heavily subsidized fuel price of Indonesia is likely to be raised next month according to Indonesian media sources. Various high officials, including Economic minister Hatta Rajasa, discussed the possibility to raise the fuel price from IDR 4,500 (USD $0.46) to IDR 6,500 (USD $0.67) per liter starting from May. This increase will only apply to private passenger cars, and not to motorcycles and public transportation. However, president Susilo Bambang Yudhoyono has not made up his mind yet.

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  • The Rise of Indonesia's Cement Production and Consumption

    Both Indonesia's cement production and cement consumption have risen rapidly in recent years. As the country has been showing solid economic growth for a decade - and is forecast to continue this growth -, property and infrastructure projects have grown in number accordingly, thus increasing demand for building materials such as cement. Moreover, the government is committed to enhance the country's much-needed infrastructure development.

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