2023 State Budget: Government Targets 5.3% Growth for Indonesian Economy

The Indonesian government targets 5.3% economic growth in its 2023 macroeconomic assumptions.

This was stated by President Joko Widodo ("Jokowi") in his speech delivering the 2023 State Budget Draft (RAPBN) and Financial Note before the plenary session of the Indonesian House of Representatives (DPR RI) at the Nusantara MPR/DPR/DPD RI Building, Jakarta, on Tuesday (16/8/2022).

“2023 economic growth is projected at 5.3%. We will strive to maximize efforts in maintaining the sustainability of national economic strengthening,” said President Jokowi.

With the strengthening private sector as the engine of growth, fiscal policy management must be directed towards creating a balance between improving productivity and competitiveness. This can be achieved by maintaining fiscal health and sustainability to face future risks and volatility.

Regarding other macroeconomic assumptions, namely inflation, the president stated that it will be maintained at around 3.3%. The State Budget policy will continue to be directed towards anticipating inflationary pressures from external factors, especially energy and food inflation.

Other basic macroeconomic assumptions include a targeted exchange rate of Rp14,750 per US dollar. The 10-year State Debt Securities (SUN) interest rate is set at 7.9%, and the price of Indonesian crude oil is pegged at US$90 per barrel.

Crude oil lifting is targeted at 660 thousand barrels per day, and gas lifting at 1,050 thousand barrels of oil equivalent per day.

The following are the details of the 2022 outlook and the 2023 basic macroeconomic assumptions:

* Economic Growth (% yoy): 5.1 - 5.4; 5.3
* Inflation (% yoy): 4.0 - 4.8; 3.3
* Rupiah Exchange Rate (Rp/US dollar): 13,500 - 14,900; 14,750
* 10-Year SUN Interest Rate (%): 6.85 - 8.42; 7.9
* Crude Oil Price (US$/barrel): 95 - 100; 90
* Crude Oil Lifting (thousand barrels/day): 625 - 630; 660
* Gas Lifting (thousand barrels of oil equivalent/day): 956 - 964; 1,050