JAKARTA: Indonesian President Joko Widodo proposed a budget of 3,304.1 trillion rupiah ($216.24 billion) on Wednesday for 2024, his final year in office, promising to guard the economy against global challenges and keep food prices stable.
The budget proposal, tabled in parliament, is about 6% bigger than this year’s spending plan, which have been revised up to 3,123.7 trillion rupiah.
It also assumes 5.2% economic growth next year, below 2023’s target of 5.3%.
Jokowi, as the president is popularly known, said he targets the 2024 budget deficit to be at 2.29% of gross domestic product, roughly the same as the latest outlook for this year’s deficit of 2.28%.
“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% next year to 2,781.3 trillion rupiah, from this year’s 2,637.2 trillion rupiah. Jokowi said inflation will be managed around 2.8% next year, within the central bank’s target range of 1.5% to 3.5% for 2024. Annual inflation in July was 3.08%.
His proposal also assumed the rupiah exchange rate to average around 15,000 a dollar and the 10-year bond yield at 6.7% 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.
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