With strong fiscal management, accompanied by effectiveness in promoting economic transformation and improving people's welfare, the open unemployment rate in 2023 is expected to be reduced to the range of 5.3 percent to 6.0 percentJakarta (ANTARA) - The government has set the budget deficit limit at 2.85–3.00 percent of the gross domestic product (GDP), or Rp598.2 trillion, for 2023 after taking state budget requirements and state revenue optimization into account.
President Joko Widodo (Jokowi) conveyed this in his speech on the draft state budget and financial notes for the 2023 fiscal at the Parliamentary Complex here on Tuesday.
"The budget deficit in 2023 is the first year that we will return to a maximum deficit of 3 percent of the GDP," he noted.
The deficit would be financed by utilizing safe and managed financing sources while maintaining fiscal sustainability, he informed. The commitment to maintaining fiscal sustainability is intended to keep the debt risk within safe limits through financial market deepening.
"The government continued to improve the effectiveness of investment financing, especially for state-owned enterprises (SOEs) and the Public Service Agency (BLU), which was focused on completing central and regional strategic infrastructure, community, empowerment, as well as financing and spending synergies," he added.
Widodo further said that the government will continue to encourage innovative financing policies through cooperation between the government and business entities (KPBU), including strengthening the role of SOEs, the BLU, Investment Management Institutions (LPI), and Special Mission Vehicles (SMV), as well as accelerating infrastructure development and improving access to financing for low-income communities, micro, small, and medium enterprises (MSMEs), and ultra-micro businesses.
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The government will also utilize the over budget balance (SAL) to maintain economic stability and anticipate uncertainty, as well as improve integrated cash management to maintain a reliable and efficient fiscal buffer.
"With strong fiscal management, accompanied by effectiveness in promoting economic transformation and improving people's welfare, the open unemployment rate in 2023 is expected to be reduced to the range of 5.3 percent to 6.0 percent," Widodo disclosed.
In addition, the poverty rate is targeted to be in the range of 7.5–8.5 percent, the Gini ratio 0.375–0.378, and the Human Development Index 73.31–73.49, the President said.
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Meanwhile, the Farmer's Exchange Rate (NTP) and Fisherman's Exchange Rate (NTN) are also expected to increase to reach a range of 105–107 and 107–108, respectively.
"We hope that the discussion of the 2023 Draft State Budget will be carried constructively in order to realize an Advanced Indonesia, based on Pancasila and the 1945 Constitution," he added.
After the COVID-19 pandemic began, the government decided to relax the deficit figure. In 2020, the realization of the deficit reached 6.09 percent though the target was set at 6.34 percent. For this year, the maximum deficit limit has been lowered to 5.7 percent.
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Translator: Sella Panduarsa G, Resinta S
Editor: Fardah Assegaf
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