By: Aulia Rachma
The performance of Indonesia’s State Revenue and Expenditure Budget (APBN) shows extraordinary resilience even though it is faced with various significant global uncertainties. A number of internal and external factors have contributed to this achievement, including appropriate policies, initiatives to increase state revenues, and efforts to maintain economic stability in the face of unexpected external challenges.
One of the important points in the performance of the 2024 APBN is the focus on revenue diversification. By expanding the tax base and increasing efficiency in managing state revenues, the government succeeded in achieving revenue targets that were higher than expected. These steps include increased tax oversight, increased transparency, as well as structural reforms in tax administration to reduce disparities and ensure fairness in the tax system.
Until mid-March 2024, the realization of the APBN shows very good performance. Minister of Finance, Sri Mulyani Indrawati said that the performance of the APBN until March 15 2024 remained optimal. Primary Balance also recorded a surplus of IDR 132.1 trillion. He explained that State Expenditures had grown quite high, up to 18.1 percent (year on year) to support the acceleration of development programs, elections, maintain food price stability, and protect people’s purchasing power.
The performance of the APBN is quite good, state revenues have experienced a contraction but from a fairly high baseline for two years in a row, we are still wary of commodity price volatility and also the speed of tax refunds which are needed by the business world.
In the midst of this situation and turmoil, Indonesia is still very resilient. Growth remains steady at around 5 percent. Although we also see that there are pressures that occur. So if we look at the good composition of supply and demand and we look at the overall growth of the Indonesian economy throughout 2022-2023 and we hope that until the first quarter of 2024 it will still be stable at 5 percent, this is an extraordinary achievement because the global environment is not very easy.
In addition, sustainable fiscal policy also plays an important role in maintaining economic stability in the face of global uncertainty. The government has allocated funds wisely to support key sectors that have growth potential, including infrastructure, education and health. These investments not only drive short-term economic growth, but also create a strong foundation for long-term sustainable growth.
Accommodative monetary policy also contributes to stable APBN performance. Bank Indonesia (BI) has played a proactive role in maintaining financial stability and responding to market dynamics with timely and measurable policies. The combination of balanced fiscal and monetary policies has helped reduce inflationary pressures and maintain exchange rate stability, which in turn strengthens the competitiveness of the Indonesian economy in the global market.
Governor of Bank Indonesia (BI) Perry Warjiyo said the rupiah exchange rate remained under control amidst high global financial uncertainty. With this development, the rupiah exchange rate weakened by 2.02 percent compared to the level at the end of December 2023, better than the Malaysian Ringgit, Korean Won and Thai Baht which respectively weakened by 3.02 percent, 3.87 percent and 5.39 percent.
The rupiah exchange rate in the future is predicted to be stable with a tendency to strengthen, driven by the return of foreign capital flows in line with the maintained positive perception of Indonesia’s economic prospects.
However, challenges remain, especially considering the increasing global uncertainty. There are factors that cause high uncertainty and risk. One of them is the policy of high interest rates over a long period of time (higher for longer) implemented by developed countries, especially the United States.
In addition, changes in economic and political conditions at the international level can affect Indonesia’s economic growth projections and investment inflows, trade and commodity price volatility also influence economic conditions. This complex situation has occurred throughout 2023 and will continue until 2024. Therefore, it is important for the government to remain alert and responsive to changes in global conditions, while continuing to increase the resilience of the domestic economy.
In this context, economic diversification and the promotion of innovation and investment in human capital are becoming increasingly important. Through economic diversification, Indonesia can reduce its dependence on certain sectors that are vulnerable to global market turmoil. Meanwhile, investment in education and training will increase the competitiveness of Indonesia’s workforce in the global market, enabling the country to face challenges and take advantage of emerging opportunities in an increasingly integrated digital economy.
Overall, the performance of the 2024 APBN which remains high shows the government’s commitment to maintaining economic stability and improving people’s welfare amidst global uncertainty. With wise and responsive policies, as well as efforts to strengthen domestic economic fundamentals, Indonesia has successfully navigated external challenges and built a strong foundation for sustainable growth in the future.
)* Untar Student, Department of Economics
