1. Ministry of Finance, Republic of Indonesia
INDONESIAN BUDGET

2. Ministry of Finance, Republic of Indonesia
OUTLINE
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1. 2015 Indonesian Budget
2. Budget Policies
3. Current Policies
4. Future Goals

3. Ministry of Finance, Republic of Indonesia
2015 Indonesian Budget (Summary)
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Amount
(trillion rupiah)
A. Government Revenues 1,793.6
I. Domestic Revenue 1,790.3
1. Tax Revenue 1,380.0
2. Non-tax Revenue 410.3
II. Grant Revenue 3.3
B. State Expenditures 2,039.5
I. Central Government Expenditure 1,392.4
1. Line Ministries Exepnediture 647.3
2. Non Line Ministries Expenditures 745.1
II. Transfer to Region and Rural Fund 647.0
C. Primary Balance (93.9)
D. Budget Surplus/Deficit (245.9)
% Deficit to GDP
E. Financing (E.I + E.II) 245.9
I. Domestic Financing 269.7
II. Foreign Financing (23.8)
Description
Assumption: 1 US$ = Rp11.900

4. Ministry of Finance, Republic of Indonesia
BUDGET POLICIES
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5. Ministry of Finance, Republic of Indonesia
Background
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6. 6
CHALLENGES:
Limited
Fiscal Space
Expenditure
realization is
not optimum
(piled up in
Q4)
Large
Allocation
for Subsidy
Large
Allocation
for
Mandatory
Spending
IMPROVING THE QUALITY OF PLANNING AND STATE
EXPENDITURE

7. Ministry of Finance, Republic of Indonesia
NationalDevelopmentGoalsin2015RKP(Gov.WorkPlan)
Macroeconomic
 Economic growth 5,8 %
 reduce poverty by 9-10 percent with the open
unemployment rate 5.5 to 5.7 percent
Natural Resources and Environment
 Electrification ratio increased to
83,18%;
 Energy Mix on New and Renewable
Energy (EBT) 6 %;
 Environmental quality index of 64.5
 Establishment of wastewater
infrastructure in the 764 region
Education and Health
 to improve the standard of education of the
population to be 8,37 years
 increase health insurance participant to be
86.4 million people (PBI for 86.4 million
people/dues paid by Gov./Government
contribution
Transportation and Connectivity
•The ratio of the national logistics costs to
GDP fell to 23.6%
•Construction of a new road along 240.94
km
•Construction of a new railway track and
double track railway lines along the 265
km
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8. Ministry of Finance, Republic of Indonesia
Controlling risk and maintaining fiscal sustainability
Strategies…..
Controlling Deficit
Controlling debt
ratio to GDP
1. Revenue Optimization  by keeping investment climate
and environmental conservation maintained;
2. Improving quality of spending  through increasing
productive (capital expenditure) and efficiency of material
expenditure and subsidy;
3. Improving budget structure
1.Controlling debt financing in manageable level;
2.Implementing net negative flow.
3.Directing loans for productive activities.
2,21% PDB
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2
to encourage productivity of budget in order to increase economic capacity with
controlling risk and maintain fiscal sustainability
Controlling fiscal
risk
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1.Controlling debt service ratio;
2.Maintaining fiscal buffer availability;
3.Providing measurable guarantee
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9. Ministry of Finance, Republic of Indonesia
CURRENT POLICIES
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10. Ministry of Finance, Republic of Indonesia
Price adjustment on subsidized fuel
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as of November 18th 2014, the government adjust the subsidized fuel
price (Gasoline and Diesel)
• Impact on 2014 economic growth
 Saving Rp9.4 T from fuel subsidy
 GDP growth q1 – q3 2014
 q1: 5.21%  q2: 5.12%  q3: 5.01%
 Growth rate : q1 - q3 2014: 5.1%
 Projected GDP growth in 2014 after taking into account the impact of
subsidized fuel price increases and its compensation : 5.1%
• Impact on 2015 economic growth
 Saving Rp110.2 T from fuel subsidy.
• Impact on 2015 Inflation
 Inflation as the impact of increase in fuel price are expected to be distributed in 3
months, amounting to 2.52%.

11. Ministry of Finance, Republic of Indonesia
Reallocation of the unproductive spendings to
productive spendings
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2015 Savings :
Rp110.2 T
Basic Infrastructures
 Maritime
 Food security
Social Protections:
 Education
 Health
 Welfare
Transfer to region and
rural fund
 Specific Allocation Fund
(mainly for irrigation)
 Rural fund
Reducing budget deficit
With the reallocation of
spending to more productive
sector/ activities, economic
growth in 2015 is expected to
reach 5.8%.
The fiscal space from fuel price subsidy can be utilized for funding new
infrastructures and social protection programs…

12. Ministry of Finance, Republic of Indonesia
FUTURE GOALS
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13. Ministry of Finance, Republic of Indonesia 13
Increase The Budget Quality
1. Increase the budget quality
a) Prioritizing the allocation of productive spending in accordance with
national priority plan;
b) Redesigning subsidy policies;
c) Avoiding the increase of mandatory spending;
d) Accelerating the implementation of Performance Based Budgeting and
Medium Term Expenditure Framework
2. High Tax Ratio
3. Economic growth based on investment

14. Ministry of Finance, Republic of Indonesia
Thank You