Indonesia's 2018 State Budget Targets 5.4 Percent Economic Growth

In his speech delivering the Government Statement on the Draft Law concerning the State Budget (RAPBN) for Fiscal Year 2018 and its Financial Notes, President Joko Widodo set a target of 5.4 percent economic growth for next year. This figure is higher than the 2017 growth target of 5.2 percent. However, up to the first half of 2017, the domestic economy only grew by 5.01 percent.

This optimistic economic growth will be achieved through maintaining public consumption, increasing investment, and improving export and import performance. Economic development in 2018 will be directed towards growing the Maluku, Papua, Kalimantan, Sulawesi, Bali, and Nusa Tenggara regions through increased connectivity with Java and Sumatra.

Other macroeconomic assumptions in the 2018 RAPBN include inflation being maintained at 3.5 percent; the rupiah exchange rate at Rp 13,500 per US dollar; the average interest rate on 3-month State Treasury Securities at 5.3 percent; and the average price of Indonesian crude oil estimated at US$ 48 per barrel, with a volume of marketable oil and gas reaching 2 million barrels, comprising 800,000 barrels of crude oil and 1.2 million barrels of oil equivalent natural gas.