Global Economic Turmoil Impacts the 2024 State Budget: Sri Mulyani Outlines Mitigation Strategies

Jakarta, INTI - Finance Minister Sri Mulyani Indrawati presented before the Budget Committee (Banggar) of the Indonesian House of Representatives (DPR RI) regarding the implementation of the 2024 State Budget (APBN). In her presentation, Sri Mulyani highlighted various global economic challenges that could affect the 2024 State Budget and the mitigation measures the government has prepared to maintain Indonesia's economic stability.

Global Economic Challenges

Sri Mulyani outlined that global economic dynamics remain highly volatile. Factors such as geopolitical tensions, economic fragmentation, and the potential for prolonged recession continue to pose serious threats to the global economy. Additionally, the volatility of commodity prices, including crude palm oil (CPO), coal, and copper, also remains a major concern.

She added that domestic development agendas such as reducing stunting, tackling extreme poverty, and building the new capital city Nusantara (IKN) also require special attention and adequate budget allocation.

Resulting Impacts

According to Sri Mulyani, these global challenges could disrupt national economic stability, reflected in unstable inflation, interest rates, and exchange rates. Furthermore, the risks to the State Budget are also increasing, with potential declines in state revenue, increased spending, and a widening budget deficit.

Mitigation Strategies

To address these challenges, the government has prepared various mitigation measures. The State Budget will function as a shock absorber to stabilize prices and control inflation through various food assistance programs such as the Staple Food Price Stabilization (SPHP) and Regional Inflation Control Teams (TPID). The government will also provide subsidies and compensations to protect the purchasing power of the people.

Sri Mulyani emphasized the importance of maintaining the discipline of the 2024 State Budget to keep it healthy and credible. The budget deficit is expected to be kept under 3% of GDP. The government will also ensure efficient and stable financing through the government securities market (SBN).

Latest Statistical Data

According to the Central Statistics Agency (BPS), Indonesia's annual inflation as of June 2024 stood at 3.2%, slightly higher than the government's target range of 2%-3%. Additionally, the exchange rate of the rupiah against the US dollar depreciated by 4% compared to the beginning of the year, adding further pressure on the State Budget.

Maintaining Economic Stability

To maintain economic stability, the government will continue to monitor global and domestic economic developments and adjust fiscal and monetary policies as needed. Coordination between Bank Indonesia and the Ministry of Finance will be strengthened to ensure harmonious and effective policies.

The implementation of the 2024 State Budget faces various challenges from global and domestic economic dynamics. However, with appropriate mitigation strategies and strict fiscal discipline, Sri Mulyani is optimistic that Indonesia can maintain its economic stability and continue with the planned development agenda.

Sri Mulyani also urged all parties, including the DPR, to cooperate and support the policies formulated to ensure the smooth implementation of the 2024 State Budget and bring maximum benefits to all Indonesian citizens.