"The outlook for the global economy is expected to improve. Although, we have to work hard to face the uncertainty that comes from the economic slowdown being witnessed in many developing countries as well as the prospects of economic recovery of developed countries," President Joko Widodo announced while delivering a speech on the 2017 State Budget Draft and its Financial Notes at the plenary session of the House of Representatives (DPR) here on Tuesday.
However, the positive impact of the implementation of government policy contained in the Economic Policy Package was expected to be a stimulus for economic growth, particularly through sustainable infrastructure development.
In addition, the government also disclosed that it was assuming the inflation rate in the state budget to remain at 4 percent.
"The improvement of national connectivity is projected to create efficiency in the national logistics system. As a result, it can support the stability in commodity prices," the president stated.
The government has also provided a reserve fund to ensure food security and to stabilize food prices.
The allocation of these funds will facilitate the policy for food subsidy, food security programs and supply of rice for poor people.
The government also assumed that the value of the rupiah currency against the US dollar will be at around Rp13,300 per US dollar.
"The government is cooperating with Bank Indonesia and Financial Services Authority to strengthen the financial sector. Financial deepening is expected to affect capital inflows in the financial market and reduce pressure on the exchange rate," the president pointed out.
Meanwhile, the government lodged three-month SPN (Treasury Bills) interest rate at 5.3 percent.
"Indonesian crude is at US$45 per barrel," the president noted.
On oil lifting, the government has set a target of about 780 thousand barrels per day and gas lifting at 1.15 million barrels oil equivalent per day.
"The basic assumptions reflect the current economic conditions. The assumptions also consider the economic projections in the future," the president remarked.(*)