Finance Minister: State Budget as an Instrument Keeps Stability

INDUSTRY.co.id - Jakarta - Finance Minister Sri Mulyani Indrawati reminded the importance of maintaining the credibility, health and resilience of the State Budget to become the main instrument of fiscal policy to maintain economic stability.

"The government understands that the Indonesian economy is still overshadowed by uncertainty, so the government continues to maintain the credibility, health and resilience of the state budget," Sri Mulyani said in a plenary session in Jakarta on Thursday (31/5/2018)

Sri Mulyani attended the plenary session to read out the government's response to the general view of the fraction on the Macroeconomic Framework and the Principles of Fiscal Policy in the context of the Preliminary Budget Draft Discussion of 2019 Fiscal Year.

She explained that the government has and will continue to implement fiscal reforms to maintain the momentum of economic growth which is currently supported by improved investment and export performance.

However, she added, the fiscal credibility through the APBN instrument cannot run alone, because it requires support from conducive economic stability.

According to Sri Mulyani, considering the current condition, the stability of the economy should take precedence over pursuing economic growth.

"The government will continue to conduct intensive coordination with the monetary authorities and the financial services sector in undertaking domestic economic stabilization measures," explained the former Managing Director of the World Bank.

Sri Mulyani believes that the policy mix for stabilization supported by ongoing structural reform efforts can encourage economic growth in the medium and long term.

"In line with this, we appreciate the view on the need for the preparation of a credible APBN to safeguard business confidence," she added.

According to the plan, the draft budget draft 2019 will be done with macro basic assumptions such as economic growth of 5.4 percent-5.8 percent, inflation 2.5 percent-4.5 percent and rupiah exchange rate Rp13.700-Rp14.000 per US dollar.

Other basic macro assumptions are the 3-month SPN interest rate of 4.6 percent-5.2 percent, the ICP oil price of US $ 60 to US $ 70 per barrel, the oil lifting of 722 thousand-805 thousand barrels per day and the natural gas lifting 1.210 thousand -1.300 thousand barrels of oil equivalent per day