JAKARTA: Indonesian President Joko Widodo on Wednesday proposed to parliament a budget of 3,304.1 trillion rupiah (US$216.24 billion) for next year, setting a target of 5.2 per cent for economic growth in what will be his final year in office.
The budget proposal is about 6 per cent bigger than this year’s spending plans, which have been revised up to 3,123.7 trillion rupiah.
It also assumes 5.2 per cent economic growth next year, below 2023’s target of 5.3 per cent.
Jokowi, as the president is popularly known, said he targets the 2024 budget deficit to be at 2.29 per cent of gross domestic product, roughly the same as the latest outlook for this year’s deficit of 2.28 per cent.
“The 2024 state budget architecture must be able to respond to economic dynamics, address challenges and optimally support the development and welfare agenda,” Jokowi said in his annual budget speech to parliament, a day ahead of the anniversary of Indonesia’s independence.
The president offered no specific fiscal policy for 2024, but he underscored the importance of food and energy security and building a competitive defence industry.
He also blamed global supply chain disruption on geopolitical fragmentation.
Jokowi proposed allotting 108.8 trillion rupiah for food security, to maintain stable prices, increase farm output and further develop the government’s ongoing food estate programme.
Infrastructure was allotted 422.7 trillion rupiah, including for Jokowi’s flagship project to build a new capital city on Borneo island, called Nusantara.
Jokowi has previously set a target to move some government offices to Nusantara next year from Jakarta.
The budget proposal targets government revenues to rise 5.5 per cent next year to 2,781.3 trillion rupiah, from this year’s 2,637.2 trillion rupiah.
Jokowi said inflation will be managed at around 2.8 per cent next year, within the central bank’s target range of 1.5 per cent to 3.5 per cent for 2024. Annual inflation in July was 3.08 per cent.
His proposal also assumed the rupiah exchange rate to average around 15,000 a dollar and the 10-year bond yield at 6.7 per cent and Indonesia’s oil and gas lifting at 625,000 barrels per day and 1.03 million barrels of oil equivalent per day.
Parliament typically takes a few months to debate the government’s budget proposal.