Jakarta, Oct 26 (ANTARA Sumsel) - The 2018 state budget, with a spending set at Rp2,220.7 trillion and a revenue of Rp1,894.7 trillion, is expected to help maintain the current positive economic momentum.
The Bill on the 2018 State Budget was passed into law by the House of Representatives (DPR) at its plenary meeting on Wednesday. Hence, according to Finance Minister Sri Mulyani Indrawati, the government is optimistic of being able to maintain the current positive economic momentum.
Minister Indrawati remarked that the government lauded the support extended by the DPR's leadership and members, including the budget committee and all the commissions, which have worked along with the government, to implement the mandate of the Constitution by deliberating the 2018 state budget bill intensively and constructively.
Hence, the current positive economic momentum will continue to be strengthened in 2018, the finance minister stated.
"The government will maintain the economy and strengthen the momentum to reach 5.4 percent in 2018," Indrawati noted in Jakarta on Wednesday.
Indrawati explained that the improving economic momentum is evident from the growth in household consumption and the export sector in the first half of 2017.
However, investment has been under heavy pressure in the last three years, as companies are affected by the falling commodity prices in the international markets.
These conditions led to the occurrence of bad loans, and banks are unable to offer loans needed to drive the economy forward.
"The company will not borrow if confidence in the economy does not grow, and if the investment does not grow, the economy will not grow," Indrawati remarked.
However, conditions are improving in the second half of 2017, as commodity prices are stable and banks have cleared the balance sheet, so investment is projected to grow again.
Moreover, the government will maintain this positive momentum by strengthening the economic fundamentals, so that investors do not harbor concerns over the future prospects of Indonesia.
Thus, the minister expects household consumption to grow by five percent, an investment growth close to six percent, and exports to continue recording an upward trend in 2018.
"We expect the consumption to be stable at five percent and our investment at above five percent, close to or above six percent," Indrawati stated, adding that the export momentum will continue to "upswing" this year and in early 2018.
"May this achievement benefit the Indonesian nation to create prosperity and justice by continuing the development programs of the working cabinet, which were started three years ago," she added while delivering the government's final views at the meeting.
The theme of the 2018 fiscal policy is solidifying the fiscal management to accelerate the attainment of just growth, which means that the 2018 state budget is expected to serve as a fiscal instrument to boost economic growth as well as to support the efforts to alleviate poverty, reduce disparities, and create more jobs, she explained.
For its part, the government will pursue three fiscal strategies in 2018; first, optimizing state revenues by maintaining the investment climate; second, using budget efficiently and increasing productive budget to support priority programs; and third, encouraging efficient, innovative, and sustainable financing, she elaborated.
With the state budget law, the economic growth is set at 5.4 percent, inflation rate at 3.5 percent, interest rate on state treasury notes for three month deposit at 5.2 percent, and the rupiah's exchange rate against the US dollar at Rp13.4 thousand.
In the draft 2018 state budget, the budget deficit is projected at Rp326 trillion, or 2.19 percent, of the national gross domestic product.
To offset the budget deficit, the government plans to issue state bonds worth Rp414.52 trillion and make loans worth Rp15.5 trillion.
As part of the efforts to maintain the current positive economic momentum, Budgetary Director General of the Finance Ministry Askolani stated that the central government's spending in the 2018 state budget (APBN) worth Rp1,454.5 trillion will be directed to support the achievement of development goals,.
"The government's spending for national development is increasing, especially on infrastructure and defense, to increase security and uphold democracy," Askolani noted in Jakarta on Thursday.
Askolani noted that the central government spending worth Rp410.7 trillion is also being utilized for infrastructure development in order to address the lack of infrastructure in Indonesia's urban, regional, and border areas as well as in the outer regions.
"The target for development for the time being includes 865 kilometers (km) of new roads, 25km of toll roads, 8,695 meters of bridges, and 13,405 apartment buildings," he revealed.
He expressed hope that such infrastructure development will help to accelerate the regional economy and increase employment opportunities as well as reduce poverty swiftly, although direct benefits will be felt within the next one or two years.
Allocation of Rp34.8 trillion will be directed to three main sectors: agriculture to increase food production, tourism to support the promotion and development of 10 tourist destinations, and fisheries to improve the competitiveness of processed products and assistance in the form of 1,048 fishing boats.
The central government's expenditure worth Rp283.7 trillion will be utilized to reduce the poverty gap, to take preemptive measures to handle the increasing number of beneficiaries of the Family of Hope Program, or the poor family improvement program, from six million to 10 million, and to increase the number of beneficiaries of the non-cash food aid, among others.
In addition, the expenditure will be used to boost the quality of health services, both in terms of supply and service, and health promotion efforts as well as to maintain and improve the quality of the Public Health Insurance program for beneficiaries to reach 92.4 million people.
Furthermore, expenditures are directed to improve access, distribution, and quality of education, among others, through increasing access to the Smart Indonesia program reaching 19.7 million students and providing mission scholarships to 401.5 thousand students to continue their education.
Askolani stated that Rp365.8 trillion was allocated for the state apparatus and community service to be used for strengthening bureaucratic reforms to improve the quality of public services, improving the welfare of the state apparatus and pensioners, and reforming the state apparatus pension scheme.
Finally, the defense, security, and democracy sectors will receive Rp220.8 trillion for the procurement of defense equipment to meet the needs of the state defense forces, to develop the defense industry, and to improve the maintenance of security and order.
"Additional funds have been allocated for the police to take precautionary measures to secure the regional head elections in 2018 as well as to make preparations for the 2019 legislative and presidential elections. For the preparation of this election, the allocated funds reached Rp16 trillion," Askolani said.
