Budget pressure building
A bloated budget where expenditure growth outpaces revenue growth is typically the hallmark of a crisis. Yet, the official narrative remains sanguine.
Indonesia faces mounting fiscal pressure as the year draws to a close, despite a surge in revenue growth. The government's budget appears overly optimistic given the higher-than-anticipated expenditure on subsidies. The Finance Ministry maintains a positive facade while grappling with the impact of recent Middle East tensions, which have caused global oil prices to surge, nearing pre-attack highs.
Brent crude reached US$113 per barrel this week, with the annual average exceeding $90, a sharp deviation from the budget's $70 estimate. This price gap poses a significant challenge for the administration, which has pledged to maintain subsidized fuel prices amid a rapid increase in gasoline and diesel demand as consumers switch to cheaper alternatives.
Coordinating Economy Minister Airlangga Hartarto recently announced that traditional year-end travel incentives will continue for another three months, despite concerns about the economy's growth trajectory, which falls short of the government's ambitious 8 percent target.
Written by urgent.news from The Jakarta Post Academia's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Budget pressure building thejakartapost.com
