JAKARTA: Indonesia's parliamentary budget committee on Tuesday (Sep 28) approved President Joko Widodo's 2022 budget with total spending of about 2,714 trillion rupiah (US$190.40 billion), representing a fiscal deficit equal to 4.85 per cent of gross domestic product.
The budget aimed to underpin an economic recovery next year with GDP slated to grow 5.2 per cent, near the middle of a proposed 5.0 to 5.5 per cent range, committee chairman Said Abdullah announced, as the economy shakes off the impact of the coronavirus pandemic.
The approved spending was slightly larger than the president's proposed spending of 2,708.7 trillion rupiah in August, while the total revenue target was approved at around 1,846 trillion rupiah for next year.
The 2022 deficit is lower than the estimated 5.82 per cent this year and Jokowi, as the president is widely known, said in his budget proposal it lay the foundation to cut the deficit to under 3 per cent in 2023 in accordance with the current law.
A vote in a plenary parliamentary session is still needed, but the committee's endorsement is usually passed.
"Next year is a very important year for us as we aim to maintain economic recovery while on the other hand implement efforts to get the budget condition healthy again and reach fiscal consolidation in 2023," Finance Minister Sri Mulyani Indrawati told the hearing.
She said economic conditions next year would remain "uncertain and challenging" not only regarding to the pandemic but also due to a tightening of monetary policy that many countries are expected to undergo.
Southeast Asia's largest economy pulled out of recession in the second quarter of the year. While the recovery momentum was hit by fresh coronavirus curbs in July, the central bank said last week domestic activity had gradually improved since restrictions were eased in late August.