Indonesia proposes $188b 2022 budget

Indonesia’s president on Monday proposed a $188 billion budget for 2022 with a narrowing fiscal deficit and higher growth targets, but some analysts warn uncertainties over the COVID-19 pandemic could push the budget plans off the rails.

In his budget speech, President Joko Widodo told parliament the theme of next year’s budget would be to accelerate the economic recovery from the pandemic and strengthen structural reforms, with controlling COVID-19 still a main focus.

The 2022 budget proposal, amounting to 2,708.7 trillion rupiah ($188.30 billion), was slightly bigger than the 2,697.2 trillion rupiah spending predicted for this year.

The 2022 economic growth target was set in a range of 5 per cent to 5.5 per cent, up from 2021’s 3.7 per cent to 4.5 per cent estimate. The economy shrank by 2.1 per cent last year, the first contraction since 1998.

“We will utilise all resources...to control the pandemic,” Jokowi, as the president is popularly known, said.

The budget proposal called for a deficit target of 4.85 per cent of GDP, compared with this year’s revised deficit forecast of 5.82 per cent. Jokowi said the government was on track to bring the deficit down to under 3% in 2023 to comply with current laws.