President-elect commits to limit budget deficit to 3%: Indrawati

Jakarta (ANTARA) – President-elect Prabowo Subianto is committed to keeping the State Revenue and Expenditure Budget (APBN) deficit below 3 percent of gross domestic product (GDP), said Finance Minister Sri Mulyani Indrawati, Monday. “We have conveyed this to Pak Prabowo and he has stated his commitment to keeping the deficit below 3 percent,” he said at a press conference regarding the fundamental conditions of the economy and the Draft State Revenue and Expenditure Budget (RAPBN 2025) in Jakarta. .

He also assured that the transitional APBN prepared by the Joko Widodo (Jokowi)-Ma’ruf Amin government would continue to be synchronized and coordinated with the next government.

The government has now submitted the Macroeconomic Framework and Fiscal Policy Guidelines (KEM PPKF) to the synchronization task force of president and vice president-elect Prabowo Subianto and Gibran Rakabuming Raka.

The framework includes several macroeconomic targets for the 2025 fiscal year that have been agreed upon by the government and the Budget Body of the House of Representatives (Banggar DPR), including economic growth of 5.1–5.5 percent and an exchange rate of IDR 15,300–IDR 15,900 per US dollar .

These targets also include maintaining the 10-year Government Securities (SBN) interest rate at the level of 6.9–7.2 percent, oil prices of US$75 to US$85 per barrel, oil production of 580 thousand–605 thousand barrels per day, and production natural gas. amounting to 1.003 million–1.047 million barrels per day.

Development indicators covered in this guideline include the poverty rate, Gini ratio, open unemployment rate, human resource index, and exchange rate for farmers and fishermen.

The targeted poverty rate is 7–8 percent, with an extreme poverty rate of zero percent. The targeted Gini ratio is 0.379–0.382, the open unemployment rate is 4.5–5.0 percent, and the human capital index is 0.56. Meanwhile, the exchange rate for farmers and fishermen is targeted to be maintained in the range of 115–120 and 105–106 respectively.

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Apart from the deficit of 2.29–2.82 percent of GDP, KEM-PPKF has also set fiscal targets for the 2025 APBN, including state revenue (12.30–12.36 percent of GDP), state expenditure (14.59–15.36 percent). 18 percent). GDP), and primary balance deficit (0.15-0.61 percent of GDP).

All agreed targets will be ratified at the DPR plenary meeting on July 9 2024.

“That is an agreement between the current government and the DPR, but what has been agreed for the 2025 budget will be implemented by the next government,” said Indrawati.

The Ministry of Finance will report to the DPR Banggar in early July regarding the implementation of the APBN for the first semester of 2024 and end-of-year projections which will be the basis for preparing the 2025 APBN.

“We are coordinating the entire process of preparing the RAPBN with the team appointed by the President-elect, and all discussions (with the DPR) have been reported,” said Indrawati.

After the session on July 9, the Ministry will prepare a Draft Law on the 2025 APBN which will be presented by President Widodo at the Annual Session of the People’s Consultative Assembly (MPR) on August 16.

Indrawati reiterated the government’s commitment to continue communicating, coordinating and synchronizing budget preparation with the elected President.

“These steps were taken to ensure that there are no fundamental differences between the draft budget prepared by President Jokowi’s government and the priority programs that will be implemented by the new government,” he added.

The aim is to provide clarity and avoid “speculation regarding the political process and budget formulation,” he stressed.

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Translator: Anton Santoso
Editor: Rahmad Nasution
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