Agreement reached on Indonesia 2025 budget assumptions, set for parliament vote
4:00 am Wednesday, September 04th, 2024
JAKARTA (Reuters) – An Indonesian parliamentary committee and the government have reached agreement on key economic assumptions for 2025 for the new administration led by Prabowo Subianto, who takes office next month, the budget committee’s chair said on Wednesday.
Most of the budget assumptions in the original 2025 proposal by outgoing President Joko Widodo were approved, except for the rupiah exchange rate against the dollar, 10-year bond yield and oil-lifting target, committee chair Said Abdullah told Reuters.
A wider parliamentary vote is needed to approve the 2025 budget, likely later this month or in October, but the committee’s endorsement is usually passed.
The assumption for the rupiah in 2025 was slightly strengthened to 16,000 per dollar from 16,100. The target for oil lifting was raised from to 605,000 barrels per day (bpd) from 600,000 bpd.
The government and committee also agreed to lower the 10-year bond yield target to 7% from 7.1%. The changes were made to better reflect current economic conditions and future prospects, the government explained.
The remaining key budget assumptions were unchanged, with the GDP growth target kept at 5.2% and inflation at 2.5%.
The forecast for average Indonesian crude price is $82 per barrel, and natural gas lifting was seen at 1.005 million barrels of oil equivalents per day (BOEPD).
Revenues were tentatively agreed at 3,005.13 trillion rupiah ($194 billion) while spending was seen at 3,621.31 trillion rupiah. The 2025 budget deficit forecast was maintained at 2.53% of GDP, a narrowing from an expected 2.7% gap in 2024.
($1 = 15,475 rupiah)
(Reporting by Stefanno Sulaiman and Ananda Teresia; Editing by Tom Hogue and John Mair)
