The Government and Commission XI of the Indonesian House of Representatives has agreed on the Basic Macroeconomic Assumptions on the State Budget Bill for Fiscal Year 2022.
The agreed amount of economic growth is 5.2-5.5 percent (year on year), an inflation rate of three percent, the rupiah exchange rate of Rp 14,350/USD and the 10-Year Government Securities (SUN) interest rate of 6.8 percent.
Prior to reaching the agreement, Minister of Finance Sri Mulyani at the Working Meeting with Commission XI of the DPR RI estimated economic growth in the range of 5.0-5.5 percent. This is due to the COVID-19 pandemic which is still affecting the Indonesian economy.
“This is one of the most difficult economic forecasts as there are so many uncertainties. We cannot predict the pandemic 100 percent,” said Sri, Monday (30/8).
She said that Indonesia needs to be aware of the tapering factor, supply disruption, and administered prices in order to maintain inflation. Even though the average inflation in 2021 is still below 1.5 percent, however next year, the factors affecting must be carefully considered.
“The Government will continue to carry out various reforms to be able to improve in terms of communication, distribution, supply side, as well as the pattern of seasonality which usually affects inflation,” she explained.
Meanwhile, in providing projections for the exchange rate and interest rate for 10-year SUN, the Minister said that the determining factor was the movement of international interest rates and US dollar denominations, which depended heavily on the economic recovery in the United States.
“In terms of these two factors, especially the United States, we need to anticipate movements against our rupiah. The Indonesian rupiah in terms of yield to date depreciation is at 2.3 percent, compared to other emerging countries which experienced a deeper correction, Indonesia is relatively good,” she remarked. (PR of Ministry of Finance/UN) (EST/LW)