State Budget realisation: State expenditure still maintained
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Realisasi APBN: Belanja negara masih bertenaga
18 April 2023
By: Annasa R. Kamallina & Maria Elena
Jakarta - The government successfully maintained the state expenditure realisation until the first quarter of 2023. Even though the portion of the total spending of the state budget (APBN) ceiling is relatively lower, the increase in the spending of the central government and the regional governments is encouraging.
The Finance Ministry announced that the total state expenditure until March 2023 reached Rp518.7 trillion. The amount is equal to 16.9% of the total state expenditure in the 2023 APBN.
Compared to 2022, the state expenditure portion is lower. For comparison, the state expenditure portion in March 2022 reached 18.1% of the 2022 APBN ceiling, while the previous year reached 19%.
Finance Minister Sri Mulyani Indrawati said that state expenditure realisation until the first quarter of 2023 increased by 5.7% from 2022.
She said that the expenditure of the central government has reached Rp347.3 trillion or 15.5% of the 2023 APBN ceiling. The central government’s expenditure realisation increased by 10.5% year-on-year (YoY).
“It means that we have spent Rp347.3 trillion. It is 15.5% of the total APBN expenditure allocation this year,” she said at the press conference titled APBN Kita on Monday (17/4).
From the total expenditure of the central government, the expenditure of ministries and institutions reaches Rp166.9 trillion or 16.7% of the 2023 ceiling.
The expenditure of ministries and institutions is used to distribute school operational assistance (BOS), social aid, premium subsidies, and national health insurance, as well as to carry out infrastructure construction and ministry and institution operations.
Meanwhile, non-ministry expenditure has reached Rp180.3 trillion or 14.5% of the APBN, which is mainly used to pay for pensions, debt interests, and subsidies.
Sri Mulyani added that, besides the expenditure of the central government, the government has also realised a budget for transfer to regions (TKD) that reaches Rp171.4 trillion or 21% of the APBN ceiling.
The realisation of TKD in March 2023 is lower by 2.9% from last year.
“It is because, this year, we are implementing the HKPD (Central and Regional Governments Financial Relations) Law where the DAU (general allocation fund) can only be transferred if they have signed for the DAU, especially for education and health expenditures that are mandatory,” she said.
Even though the global economic condition is weakening, Financial Minister Sri Mulyani is optimistic about Indonesia reaching 5% this year. It is reflected on the increasing consumer confidence index (CCI), which weakens inflation.
The consumption of the people in March 2023 is relatively strong with a CCI of 123.3, which increased from 122.4 in February 2023.
“It is still related to the inflation that we can control and the public’s purchasing power that is recovering gradually,” she said.
Meanwhile, in his official statement, Bank Indonesia Governor Perry Warjiyo stated that it was important to apply a mixed policy to maintain the stability of the macroeconomy and the financial system as well as to support growth recovery.
Regarding this matter, the policy of the central bank does not only rely on the debt interest policy, but also other policy instruments, such as exchange rate intervention, capital flow management, and macroprudential policy or policy mix.
Bank Indonesia is encouraging digitalisation in the payment system sector through the development of cross-border payment (CBP).
Regarding this matter, Perry Warjiyo said that Indonesia‘s step to pioneer the signing of regional payment connectivity (RPC) with five ASEAN countries was a concrete form of an international cooperation to support economic growth recovery.
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