The minister pointed to a number of concrete challenges in 2019 including global economic uncertainty brought about by the process of normalization in the U.S. monetary policy, appreciation of the U.S. dollar and liquidity tightening that results in capital outflow from developing economies.
The condition is worse by protracted trade war between the United States and China, uncertainty in Brexit scenario, and geopolitical tension in a number of parts of the world contributing to growing risk of negative global economic growth, she said.
"Our economic targets have to be more realistic by adjusting to global economic condition that our fiscal policy through 2019 state budget is more credible and selective," she said.
The targets set in the 2019 state budget are:
economic growth 5.3 percent,
inflation 3.4 percent
rupiah exchange rate 15,000 per U.S. dollar
Indonesian oil price US$70 per barrel
oil lifting per day 775,000 barrels per day
gas lifting per day 1,250,000 barrels oil equivalent
and interest rate on 3-montyh SPN (treasury bill) at 5.3 percent.
Basd on the assumptions , the state income target is set at Rp2,165.1 trillion and state spending at Rp2,461.1 trillion - or budget deficit of Rp296 trillion, or 1.84 percent of the country`s Gross Domestic Product (GDP), lower than 2018`s deficit target of Rp314.2 trillion or 2.12 percent of the GDP .
Reactions of factions
Deputy chairman of the House Budget Department Ahmad Rizki Sadig read out reactions of the political party factions to the 2019 state budget.
The factions of PDIP, Golkar, Demokrat, PAN, PKB, PPP, Nasdem and Hanura approved the draft state budget 2019 to be passed into Law.
Ahmad Rizki said the Gerindra faction chose to give no opinion and PKS faction accepted the budget with 42 annotations such as significant revision of rupiah value against the dollar as a government`s failure to improve the competitiveness the country`s economy in the global market. *