Jokowi seeks precise spending plan for below three-percent deficit

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President Joko Widodo (Jokowi) called on his staff to prepare a correct, detailed, and precise spending plan to return the state budget deficit to below three percent of the gross domestic product (GDP) in 2023.

“Next year, we will start again with provisions, according to regulations, a deficit below three percent of the GDP. Therefore, the planning must be really detailed, correct, and precise,” Jokowi stated while opening the National Development Planning Conference (Musrenbangnas) at the State Palace, Thursday.

The head of state urged ministries and non-ministerial institutions (K/L) to sharpen their spending to be right on target. Moreover, to encourage spending ability, the ranks in the relevant ministries/agencies should also increase tax revenues, i.e. taxes and customs.

“I urge ministries and non-ministerial institutions to sharpen their spending in an effort to increase the quality of their spending,” Jokowi affirmed.

The instruction to sharpen spending in an effort to return the state budget deficit at below three points is one of the president’s six directives to address the impact of the current global economic uncertainty.

In accordance with Law Number 2 of 2020 on State Financial Policy and Deficit Financial System Stability, the government has flexibility in setting the state budget deficit exceeding three percent of the GDP in 2020, 2021, and 2022 fiscal years to meet the financing needs for COVID-19 handling.

However, in 2023, according to the same law, the state budget deficit must return to below three percent of the GDP. Hence, the government has set a target for the state budget deficit in 2023 of Rp562.6 trillion to Rp596.7 trillion, or around 2.81 percent to 2.95 percent of the GDP.

In 2023, the government targets state revenues to reach 11.28 percent to 11.76 percent of the GDP, or Rp2,255.5 trillion to Rp2,382.6 trillion. Meanwhile, state spending next year is estimated at 14.09 percent to 14.71 percent of the GDP or Rp2,818.1 trillion to Rp2,979.3 trillion.

Source: Antara News