President Joko Widodo said Indonesia aims to cut its fiscal deficit to less than 3% of its gross domestic product next year for the first time since 2019.
“Moving forward, we have to stay vigilant. The risks from global economic turbulence remain high,” the president said. “The slowdown of the global economy continues to have the potential to affect the rate of short-term national economic growth.”
President Jokowi said Indonesia’s economic growth was largely supported by household consumption, good exports, and investments. Even though global conditions are currently unstable, domestic investment still reaches the given target and even exceeds it, he said.
President Jokowi said the government has targeted to reduce the poverty rate in 2023 to approximately 7.5 and 8.5 percent, and the open unemployment rate to be approximately 5.3 and 6.0 percent.
Statistics Indonesia (BPS) Deputy Setianto on Monday said Indonesia’s trade balance in July experienced a surplus of $4.23 billion, thanks to the contribution of the non-oil and gas sector surplus of $7.31 billion. Meanwhile, the oil and gas sector experienced a $3.08 billion deficit in the same period.
This makes Indonesia’s trade balance in surplus for 27 consecutive months since May 2020. Setianto said the value of Indonesia’s exports in July was $25.57 billion, an increase of 32.03 percent compared to July 2021 of $19.37 billion. However, exports in July 2022 decreased by 2.20 percent when compared to June 2022 at $26.15 billion.
President Jokowi, at the Inflation Control Coordination Meeting at the State Palace, said Indonesia’s inflation rate was still under control at 4.94 percent, relatively small when compared to other countries. Jokowi said Indonesia’s inflation rate is low because fuel oil and electricity prices have not risen — prices are government subsidized prices and not actual prices.
The President also referred to the ongoing pandemic and other crises that have emerged, such as the war between Russia and Ukraine, the food crisis, the energy crisis, and the financial crisis, which affect the country. Jokowi called on his ministers to work extra hard to suppress the inflation rate, which has exceeded five percent in several regions.
Indonesia’s windfall export earnings thanks to high commodity prices may start dwindling, Statistics Indonesia (BPS) warned on Monday, despite the country booking a larger-than-expected surplus in July. BPS has now warned the nation’s export gains have largely been a reflection of rising prices, while export volumes have remained relatively stagnant.
“This windfall could end if commodity prices return to normal. Because export volumes of our main commodities tend to be stagnant, this may be something that we need to pay attention to in regards to our exports in coming months,” BPS Deputy Setianto said.
Indonesia is at the “pinnacle” of international leadership, Its economy is strong enough to withstand global headwinds, Indonesian President Joko Widodo said in his annual speech to parliament.
Ahead of Indonesia’s 77th independence day on August 17, Widodo said on Tuesday that the country’s economic fundamentals remained strong “in the midst of global economic turbulence” and as “crisis after crisis haunts the world”.
On the topic of rising prices, the Indonesian leader said inflation reached 4.9% in July. This compares with 7% in the Association of Southeast Asian Nations (ASEAN) and 9% in developed countries.
President Jokowi said the government is calculating how much longer it can sustain a policy of keeping fuel prices unchanged, while the central bank governor hinted at keeping rates steady at an upcoming policy review. Jokowi signaled earlier this week that the government is considering raising fuel prices. He has also repeatedly said the energy subsidy budget, which has been tripled to IDR502 trillion (S$47 billion) this year, is too large. Officials with Bank Indonesia have played down the rise in headline inflation level.
Indonesia’s external debt decreased from $412.6 billion in the first quarter of 2022 to $403 billion in the second quarter, according to a Bank Indonesia (BI) report. The decrease in the government’s external debt was due to the repayment of bilateral, commercial, and multilateral loans that matured in the April-June 2022 period.
Indonesia’s debt to China in June fell the most significant among the five main lending countries. According to BI data, the position of foreign debt to China decreased by $1.06 billion in June to $20.788 billion, or approximately IDR305.3 trillion, from the previous month. Meanwhile, Indonesia’s debt to the United States was reduced by only $45 million.
The current three-level, class-based system of dividing care into three classes and determining which wards patients with different monthly premiums will receive is obsolete. Monthly premiums for his first and second-class members of Jaminan Kesehatan Nasional (JKN), Indonesia’s national health insurance scheme, will also be reduced.
The introduction of a uniform system aimed at comprehensive medical care is seen as promising. However, KRIS is primarily focused on healthcare facilities, so this change only scratches the surface of the problem.
To achieve health equity, governments must address the bigger issue. Indonesia’s OOP spending far exceeds international standards and other countries in the region.
Indonesia’s OOP expenditure accounted for 34.76% of total healthcare expenditure in 2019. This percentage exceeds the maximum of 20% recommended by the World Health Organization (WHO). Her overall per capita healthcare costs in Indonesia are also low, surpassing countries with much lower national incomes per capita such as Cambodia, Myanmar, and Laos.
In 2019, the average OOP health expenditure in low- and middle-income countries was 35.25%. Indonesia’s OOP is only slightly above this figure, far from the developed country average of 13.26%.
