Gov't maintains state budget flow amid rising energy prices: Ministry

Gov't maintains state budget flow amid rising energy prices: Ministry

Screenshot of the Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu. (ANTARA/Sanya Dinda/rst)

Jakarta (ANTARA) - The government will maintain the flow of state and expenditure budget amid rising energy subsidy spending due to the Russia-Ukraine conflict-triggered high energy prices, Finance Ministry's Fiscal Policy Agency (BKF) Head, Febrio Kacaribu, stated.

"Economic growth is maintained, and the people's purchasing power is quite good. The state budget has become a shock absorber, but it will be healthier this year," Kacaribu noted at a dialog in Jakarta on Friday.

He later remarked that the health of the state budget was important to support the government's target to reduce the deficit level to lie below three percent next year.

Moreover, the government is targeting the deficit to be lower than last year, at 4.57 percent, to help the 2023 fiscal consolidation run well.

Although the government has committed to maintaining the state budget's health, the people's purchasing power was still prioritized amid the soaring energy prices.

The people's purchasing power must be maintained in order to have a maximum impact on the realization of national economic growth this year.

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Kacaribu explained that the health of the state budget will be achieved along with the maintenance of the people's purchasing power by providing energy subsidies since Indonesia will be affected by the rising commodity prices.

The windfall from the increase in commodity prices will greatly encourage an increase in state revenues, thereby affecting the state budget that is still capable of being a shock absorber from the crisis but remains healthy.

"We believe we can do it because we have the capital with commodity prices. The income will also increase. The state budget (that is still able to be a) shock absorber can function quite effectively, even though it faces quite heavy challenges," he remarked.

Meanwhile, regarding the additional amount of the state budget burden due to the provision of energy subsidies, Kacaribu said it would depend on how long the high energy prices would last.

“This will depend a lot on our day-to-day calculations and how long these prices will stay high enough. We prepare the range," he concluded. 

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