The economic recovery has continued to strengthen in Indonesia for this yearJakarta (ANTARA) - Asian Development Bank (ADB) senior economist Henry Ma has forecast Indonesia's state income in 2022 to surpass its target akin to that observed in 2021.
Indonesia's state income had reached Rp2,003.1 trillion last year, constituting 114.9 percent of the target of Rp1,743.6 trillion set in the 2021 state budget.
This year, the government has targeted the state income to reach Rp1,846.1 trillion in the state budget.
"Economic recovery has continued to strengthen in Indonesia for this year," Ma noted during an online media briefing accessed in Jakarta on Wednesday.
The senior economist drew attention to three reasons underlying the higher-than-targeted income forecast, with the first being the increasing economic activities in the country.
The rise in economic activities is apparent from various indicators of consumer activities in the first quarter of 2022 that had continued to increase, including the consumer confidence index and retail sale index.
The second reason is related to several changes in tax policies that begin to take effect this year.
The third reason concerns global commodity prices. Despite an increase in the prices of wheat flour and crude oil that will potentially push inflation, the surge in the prices of coal, palm oil, and nickel will contribute greater income to Indonesia.
"Hence, the shock impact of commodity prices on the fiscal condition should be negative, but it is modest or simple," he stated.
Ma has forecast the country's inflation to increase to 3.8 percent this year due to a hike in the prices of food and fuel that will put pressure on the government's subsidy policy.
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Translator: Agatha Olivia V, Suharto
Editor: Sri Haryati
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