Indonesia Latest: Jokowi Sees 2024 Budget Gap at 2.29% of GDP

Indonesia sees gross domestic product growth of 5.2% next year as it aims to keep the budget deficit within 2.29% of GDP, President Joko Widodo said in his fiscal report to the parliament.

(Bloomberg) — Indonesia sees gross domestic product growth of 5.2% next year as it aims to keep the budget deficit within 2.29% of GDP, President Joko Widodo said in his fiscal report to the parliament.

Earlier on Wednesday, Jokowi said during his annual state of the nation address that the country is entering political season and tension is heating up ahead of the February 2024 election.

The leader seeks to cement his legacy with the creation of a $34 billion new capital city and the push to become a manufacturing powerhouse that will help lift resource-rich Indonesia into the ranks of high-income nations by 2045. The country will hold a general election on Feb. 14.

Indonesia announced on Wednesday that the much-awaited investment plan for the $20 billion climate financing deal was pushed to the end of the year instead of this week.


The rupiah has held on to its gains after Jokowi’s budget report, up 0.3% to 15,291 against the US dollar as of 2:42 p.m. The benchmark stock index is down about 0.7%.

Indonesia Looks to Raise Civil Servants Pay (2:47 p.m.)

Indonesia wants to raise civil servants’ salaries by an average 8% in 2024 and to boost pensions of retired civil servants by 12% as part of bureaucratic reforms to improve welfare and remuneration, Jokowi said during his budget speech. Other announcements include incentives to boost use of electric vehicles and infrastructure spending set at 422.7 trillion rupiah.

With strong fiscal management together with effectiveness in transforming the economy and improvement of people’s welfare, the government is hoping to reduce the 2024 unemployment rate to within 5%-5.7%.

Indonesia Sets 2024 GDP Growth (2:36 p.m.)

Next year’s economic growth target is lower than the 5.3% expansion set by Jokowi when he laid out the 2023 budget a year ago.

Inflation is expected to cool to 2.8% next year, in line with the central bank’s 1.5%-3.5% target, Jokowi said on Wednesday. Marcroeconomic stability will continue to be maintained, he said.

Indonesia To Draft 2025-2045 Development Law, Parliament Speaker Says (2:05 p.m.)

Law is needed to provide overall direction and prioritize national development so that every president, governor as well as mayors no longer have their own vision and mission, Speaker of Parliament Puan Maharani said in a speech on Wednesday. The government has previously published longer-term plans without formalizing them into law.

Next year, parliament will focus on El Nino’s impact on food supply, state-owned companies’ debt problem and energy transition, among other issues.

Just Energy Transition Partnership Plan Delayed (12:52 p.m.)

Indonesia has delayed the launch of the Just Energy Transition Partnership, or JETP, investment plan to year-end to give time to integrate new data and collect more input from the public, the JETP secretariat said in a statement. A draft had been submitted to the Indonesian government and partner nations for review.

Next Leader Must Be Competent to Achieve 2045 Vision (11:03 a.m.)

The country needs a capable leader who can ensure the continuity of existing policies so that Indonesia can be an economic powerhouse, Jokowi said. The question is not about who is the next president but whether the individual is capable, he said.

Indonesia needs to run a marathon, not be caught up in sprints to reach its 2045 economic vision. “Policy choices will be increasingly difficult, so courage is needed, trust is needed,” he said.

“To take difficult decisions and unpopular decisions. Therefore, in my opinion, the leader must have public trust because trust is one of the determining factors.”

Downstreaming Could Double Per Capita GDP (10:57 a.m.)

The country’s GDP per capita to reach $10,900 in a decade’s time should it continue with its downstreaming policy, and reach $25,000 by 2045, Jokowi said. 

Indonesia should expand its downstreaming policy to include non-mineral commodities such as palm oil, coconut and seaweed to benefit the regions, Jokowi said. 

“Indonesia must become a country that is also able to process its resources, be able to provide added value and bring prosperity to its people,” he said.

‘Demographic Bonus’ to Hit Peak in 2030 (10:50 a.m.)

The country’s “demographic bonus” will reach its peak in 2030, which the country can leverage to achieve its ambition of becoming a high-income country by 2045, the president said.

Some 68% of the population are at a productive stage. The country has a strategy to reach its goals, he said. “It’s just a matter of whether we want to focus our energy on moving forward or waste our energy on things that are unproductive and divisive,” Jokowi said.

Jokowi Says He Isn’t Involved In Deciding Election (10:45 a.m.)

Jokowi said he doesn’t have the power to decide the outcome of the polls, especially the presidential election given that it’s up for political parties to determine who becomes the candidates. 

“I’m a president. That’s not my authority,” he said in his annual speech. His comments come after speculation that the outgoing leader is trying to influence the outcome of the election to ensure that his successor continues his vision and to safeguard his political dynasty.

Lawmaker Calls for Unity Ahead of Polls (9:44 a.m.)

Speaker of the People’s Consultative Assembly Bambang Soesatyo kicked off Wednesday’s series of speeches with a call for unity in the government’s vision ahead of the 2024 election, even as coalitions are starting to take form.

Election fever is heating up in the world’s third-largest democracy, with some 205 million people set to cast their votes for presidential, legislative, and gubernatorial candidates on Valentine’s Day next year.

–With assistance from Soraya Permatasari, Yudith Ho, Clarissa Batino, Cecilia Yap, Norman Harsono, Claire Jiao and Eko Listiyorini.

(Updates with 2024 fiscal and economic targets.)

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