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views or policies
of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the
governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no
responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official
terms.
Republic)of)Indonesia
Suahasil Nazara
Chairman&of&Fiscal&Policy&Agency&
Ministry&of&Finance
Tokyo,&&20)21&August&2018
Outline
Quarterly2US2Growth2(%2yoy) • The$global$economy$has$
Projection of Global2Growth improved$with$the$US$
(%,2yoy) 4 being$one$of$the$main$
3.5 motors
7
3 2.8
• Improved$US$economy!
6
2.5 normalization$of$monetary$
5.3 5.3 2 policy! increases$in$$on$
1.5 capital$! reversals$ to$the$
5 US$! strengthening$of$
5.1 1
4.9 the$US$dollar.
3.9 3.9 0.5
4
0 • Some$risks$ and$challenges$
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 for$the$global$economy$in$
3 2011 2012 2013 2014 2015 2016 2017 2018 the$future:
2.4
2.2 • Financial$market$
Dollar2Index pressure$ due$to$US$
2
monetary$normalization
96
• China$moderation
1 95
• Protectionism
94
• USBChina$Trade$War$
93
0
92 • Geopolitical$tension
2011 2012 2013 2014 2015 2016 2017 2018p 2019p
91 • Climate$change$/$
Dunia Developed6countries
Negara6Maju 90 extreme$ weather
Global
89
Negara6Berkembang
Developing6countries ASEAN@5
88
Dec@17 Jan@18 Feb@18 Mar@18 Apr@18 May@18 Jun@18 Jul@18 Aug@18
Global)Turmoil)Affecting)Domestic)Economy,)especially)in)Financial)
Market)Volatility
Financial)sector)turmoil... …)in)the)midst)of)high)national)production)needs
Exchange) Rate) Rupiah/US$
as$of$16$August$2018 30% Total)Export)Import 24.48% 19
20%
11.35% 14
10%
Pertumbuhan
Miliar)USD
Billion)USD
9
Growth
0%
)10% 4
)20%
)1
)30%
Export$ Import$
Average$Exchange$ Rate$(ytd)
)40%
Nilai$Eks
Export$Value Eks$ytd
(ytd) Impor$ytd
(ytd)
)6
)50% )11
F
M
F
M
M
O
O
N
D
J
J
N
D
J
J
A
S
A
S
A
2017)J
2018)J
Balance$of$Payment
• The$balance$of$payments$ in$Q2B2018$recorded$a$
deficit$of$US$$$4.3$billion
• The$capital$and$financial$account$(TMF)$ surplus$in$
Stocks
Govt
Bonds this$period$amounted$to$US$$$4.0$billion,$while$the$
current$account$deficit$(TB)$was$US$$$8.0$billion$
(3.0%$to$GDP)
Indonesia)GDP)Growth)at)5.27%)in)Q2[2018
Strong)investment) and)stable)consumption)support)growth
5.50
GDP)Growth)(%,)YoY)
• Consumption and investment
PDB&(%,yoy) Tahunan&(%)
Quarterly Yearly remain the main engines of
5.274
5.21 5.07 5.19 growth
5.00 5.02
5.03 5.01 5.01 5.06 5.064
4.94 4.94 • Investment contribution increases
underpinning more productive
4.50 economic activity
• International trade performance is
robust as export grew at 7.70%
4.00 and import grew at 15.17%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 6
GDP)Growth)from)Production)Side
Long)holiday)in)June)2018)pushed)demand)in)certain)sectors:)manufacturing) industry,)trade,)and)
transportation
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 7
Spatial)Economic)Growth
All)regions)experienced) positive)economic)growth)in)Q2)2018
KALIMANTAN:48.05%4of4GDP
SULAWESI:46.20%4of4GDP
" All$regions$
2017:4 2018:
4.97 2017:4 experienced$ positive$
2017:4 2018: 3.31% 2018:
4.14 4.65% 6.93 6.75% growth$except$for$
Kalimantan$and$
Sulawesi
2017:4 2018:
4.40 18.18%
" Java$and$Sumatera$
SUMATERA:421.54% of4GDP grew$higher$due$to$
PAPUA:42.54%4of4GDP better$improvement$in$
secondary$and$tertiary$
2017:4 2018: sector
5.69 5.69% 2017:4 2018: " Eastern$Regions$of$
2.93 3.75%
Indonesia$experienced$
JAVA:458.61%4 of4GDP even$higher$growth$
BALI4&4NUSRA:43.06%4of4GDP due$to$bullish$mining$
sector
National4GDP4Growth 5.27%
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 8
The)Indonesian)Rupiah)Exchange)Rate
Stability)remains) preserved
Argentina 62%
Turkey 57%
Brazil 20%
17% " Volatility in global financial sector is still
Russia
2008$(15$
2018&(15&Agus) 2017 relatively high and could push further US
India 10% August)
Dollar appreciation
South&Africa 17%
" The Government and Bank Indonesia are
Indonesia 8%
closely watching the global developments
Philippines 7% and are continuing to optimize the
Korea 6% monetary and macro prudential policy
China 7% mix, as well as strengthen policy
EUR 6% coordination
Singapore 4%
Thailand 2%
Malaysia 2% Depreciation
Japan O2%
)15% )5% 5% 15% 25% 35% 45% 55% 65%
" The$Rupiah$exchange$rate$ stabilization$strategy$needs$ to$be$supported$by:
• Indonesia's$strong$economic$fundamentals$(controlled$inflation,$healthy$fiscal$deficits,$and$increased$debt$rating$and$Ease$ of$Doing$
Business)
• The$policy$of$stabilizing$the$Rupiah$value$is$measured$ in$accordance$with$the$economic$fundamentals$of$Bank$Indonesia$supported$
by$strong$foreign$exchange$reserves$
• Strengthening$policy$coordination$continues$in$order$to$improve$macroeconomic$stability,$including$coordination$of$supply$of$foreign$
exchange$supply$and$needs$among$SOEs
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 9
Inflation)Has)Been)More)Benign
...creates substantial) foundation)for)robust)consumption
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 10
CAD)and)the)Related)Policy)to)Control)
• In Q2 2018 CAD widen to 3% of GDP • The policies taken include:
influenced by the high demand for non)oil • Encourage the use of biodiesel fuel with a
and gas imports along with the increase in content of 20% from CPO (B20)
consumption and productive activities, the • Increase the use of local content
increase in oil prices, and high international • Alternative domestic products on imported
trade activities. consumption products
• Despite the widening, the CAD in Q2 2018 is • Encourage the growth of the tourism sector
still lower than the pressure period due to the
• Selectively postpone infrastructure projects
Taper Tantrum ()4.24% in 2013 and )4.26 in
that are not growth sensitive
2014).
• The government continues to give priority to
• Indonesia's CAD widening can actually signal
a positive potential in the future, due to high efforts to improve the investment climate and
competitiveness for structural improvements
imports for productive activities such as
in current transactions and in order to
infrastructure development.
support growth
2012 2013 2014 2015 2016 2017 2018
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
CAD(%$of$GDP)
CAD)(%)thd)PDB) 21.40 23.5 22.24 23.46 22.61 24.24 23.71 22.05 22.33 24.26 23.01 22.71 22.02 21.96 21.96 22.2 22.14 22.41 22.03 20.75 20.89 21.86 21.76 22.34 22.15 23.0
GDP$Growth
Pertumbuhan)PDB)(%,)yoy) 6.11 6.21 5.94 5.87 5.54 5.59 5.52 5.58 5.12 4.94 4.93 5.05 4.83 4.74 4.78 5.15 4.94 5.21 5.03 4.94 5.01 5.01 5.06 5.19 5.06 5.27
Inflasi)akhir)tahun(%,)yoy)
Inflation$(%,$yoy) 4.3 8.38 8.36 3.35 3.02 3.61 3.18)(Juli)
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 11
Direct)Investment)Grew)by)3.2)Percent)in)Q2[2018
Political) climate) factors)and)exchange) rate)volatility)make)investors)take) wait)and)see
Nominal) Growth) Nominal) Growth) Nominal) Growth) • Domestic investment is still growing
quite well, which is 32.1% higher than
(Rp Tn) (%)yoy) (Rp Tn) (%)yoy) (Rp Tn) (%)yoy) the same period the previous year.
Domestic 76.4 11.0 80.6 32.1 157.0 21.0 • Foreign investment realization growth
contracted by 12.9%.
Foreign 108.9 12.4 95.7 (12.9) 204.6 (1.1)
• Factors of exchange rate instability and
Total 185.3 11.8 176.3 3.2 361.6 7.4 the domestic political climate ahead of
the general elections made investors
take a wait and see attitude.
FDI)Share)by)Country)of)Origin) Direct)Investment)Share)by)
• Factors of global instability such as the
Q2[2018 Sectors)Q2[2018 trade war between America and China
also helped global investors tend to
Singapore
Singapura 33.5% Others,4 Mining,416.0% hold their investments.
39.0% • Investment in the mining sector is
Japan
Jepang 14.4% increasing, mainly in smelter
development projects.
" Asian countries are still the biggest
China
Tiongkok 9.4%
Transportation contributor to foreign investment in
,4Warehouse,4 Indonesia.
Hong& and4
Hong$Kong 9.4% • One third of foreign investment
Kong Telecommunic
Housing,4 ation,414.6% realization comes from Singapore.
Estate,4and4
Malaysia
Malaysia 5.3% Building,4 • There has been an increase in
Electricity
8.9% investment originating from China and
,4Gas,4and4
Water4 Malaysia.
Others
Lainnya 29.2% Crops4 and4
Plantation Supply,4
,49.8% 11.8%
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 12
2.)The)2018)Budget)Performance
Macroeconomic)Assumptions)2017[2018
2017 2018
ICP)(US$/barel) 48 48 48 67
Oil)Production)(thousands)of)
815 793 800 771**
barrel/day)
Gas)Production)(thousands)of)
1,150 1,235 1,200 1,146**
barrel/day)
*$$$Until$the$1 st half
**$$Until$June$2018
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 14
2017 2018
31-Dec- %- %- Healthy)July)2018)
BUDGET-ITEMS July- %-Growth-to- July- %-Growth-to- Budget)Realization
Realizati Realization- Budget Realization- Outlook
Realization July-2016 Realization July-2017
on to-Budget to-Budget
A. REVENUE ---1,665.2 ------------853.8 ------------49.2 ---------------10.3 ----1,894.7 ----------994.3 ------------52.5 ----------------16.5 ---1,903.0 • Healthy$budget:
I.#DOMESTIC#REVENUE ###1,655.5 ############852.9 ############49.2 ###############10.4 ####1,893.5 ##########991.0 ############52.3 ################16.2 ###1,897.6 Robust$tax$growth$
1.#Tax#Revenue,#of#which: ###1,343.6 ############680.7 ############46.2 ###############10.3 ####1,618.1 ##########780.1 ############48.2 ################14.6 ###1,548.5 and$positive$
a.#Income#Tax #######646.9 ############367.6 ############46.9 ###############11.0 #######855.1 ##########420.6 ############49.2 ################14.4 performance$of$
b.#VAT #######480.7 ############228.7 ############48.1 ###############11.6 #######541.8 ##########261.3 ############48.2 ################14.3 VAT$and$Income$
c.#Land#and#Building#Tax #########16.8 #################0.9 ##############5.8 ##############(18.1) ##########17.4 ##############1.0 ##############5.5 ##################6.9 Tax
2.#Non#Tax#Revenue #######311.9 ############172.1 ############66.2 ###############10.7 #######275.4 ##########211.0 ############76.6 ################22.6 #######349.2
• Central$
II.#GRANT ###########9.7 #################0.9 ############28.3 ##############(19.1) ############1.2 ##############3.3 ##########273.1 ##############273.1 ############5.4
Government$
Expenditure$
B. EXPENDITURE ---2,001.6 --------1,063.8 ------------49.9 ------------------2.5 ----2,220.7 ------1,145.7 ------------51.6 ------------------7.7 ---2,217.3
grows$robustly
I.#CENTRAL#GOVT#EXPENDITURE,#of#which: ###1,259.6 ############604.7 ############44.2 ##################3.3 ####1,454.5 ##########697.0 ############47.9 ################15.3 ###1,453.6
• Deficit$realization$
1.#Personel#Spending #######312.7 ############192.3 ############55.9 ################(4.9) #######365.7 ##########214.6 ############58.7 ################11.6
of$1.02%$of$GDP$
2.#Capital#Spending #######204.2 ##############58.4 ############26.0 ###############14.4 #######203.9 ############54.1 ############26.6 #################(7.4)
is$much$lower$
3.#Subsidy #######166.4 ##############67.8 ############40.2 ##############(15.2) #######156.2 ############91.3 ############58.4 ################34.5 compared$to$July$
4.#Grant ###########5.4 #################2.0 ############37.0 #############847.8 ############1.5 ##############0.0 ##############2.4 ##############(98.3) 2017$of$1.56%
5.#Social#Spending #########55.3 ##############32.0 ############54.3 ###############14.4 ##########81.3 ############56.2 ############69.2 ################75.8 • Primary$balance$
II.#TRANSFER#TO#REGION#AND#VILLAGE#FUND #######742.0 ############459.1 ############59.9 ##################1.6 #######766.2 ##########448.6 ############58.6 #################(2.3) #######763.6 surplus$is$
1.#Transfer#to#Region #######682.2 ############423.3 ############59.9 ################(0.2) #######706.2 ##########412.8 ############58.5 #################(2.5) #######703.6 significantly$
2.#Village#Fund #########59.8 ##############35.8 ############59.7 #################Z ##########60.0 ############35.9 ############59.8 ##################0.1 #########60.0 higher$than$last$
C.- PRIMARY-BALANCE -----(119.8) -------------(79.1) ------------44.5 --------------(49.0) --------(87.3) -------------(4.9) --------------5.6 --------------(93.8) --------(64.8) year,$ highlighting$
D.- BUDGET-SURPLUS-/-(DEFICIT)-(ADB) -----(336.4) ----------(210.0) ------------52.9 --------------(20.3) ------(325.9) --------(151.4) ------------46.4 --------------(27.9) -----(314.2) improving$fiscal$
%"Surplus"/"(Deficit)"to"GDP """""""(2.48) """"""""""""(1.56) %%%%%%%%%%% 53.4 """"""" (2.19) """"""""""(1.02) %%%%%%%%%%% 46.6 """"""""""""""(34.6) """"""""" (2.1) performance$and$
E. BUDGET-FINANCING,-of-which: -------361.9 ------------298.8 ------------75.2 ------------------0.9 -------325.9 ----------205.5 ------------63.0 --------------(31.2) -------314.2 sustainability$that$
I. DEBT#FINANCING #######423.7 ############296.4 ############64.3 #######399.2 ##########205.3 ############51.4 ##############(30.7) #######387.4 well$
II. INVESTMENT#FINANCING #######(59.8) ###############(0.1) ##############0.2 ########(65.7) #############(1.6) ##############2.4 ##########1,140.0
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 15
Budget)Realization)Update)until)31)July)2018
Realization) of)the)APBN)deficit)and)the)primary)balance) deficit)up)to)July)31,)2018,)the)lowest)compared)to)
the)same) period)in)2016[2017
Trillion4Rupiah Trillion4Rupiah
150,0 150,0
SiLPA realization is
92,9
100,0 88,7 100,0 lower than the previous
38,3
55,3 year
50,0 50,0
15,0
0,0 0,0
(4,9) Primary balacce deficit
(50,0)
2015 2016 2017 2018 (50,0) decreased compared to
(73,2) (79,1) the last 3 years
(100,0) (100,0)
0,63% PDB
(150,0)
(140,2) (151,3)
(150,0) Realization of the
budget deficit is lower
(200,0) 1,02% PDB (200,0)
than in 2016B2017
(210,0)
(250,0) (250,0)
(247,5)
1,55% PDB
1,82% PDB
Budget$Deficit
Defisit Anggaran SiLPA
Silpa Primary$Balanceprimer (RHS)
Keseimbangan
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 16
Increased)Economic)Activity)and)Taxpayer)Compliance)Have)a)
Positive)Impact)on)Increasing)Tax)Revenue)until)July)2018
…grows)14.6%)(without)TA)16.6%)
Trillion4Rupiah %
Influencing factors are:
780,1
800.0 16.04 1.The$increase$in$economic$growth$in$
680,7
14.04 Semester)I)2018)was)5.17)
700.0
621,1 607,9
14.64 12.04
percent)compared$to$5.01$percent$in$
600.0 the$same$semester$ last$year.$
12.04 10.04
2.Rising$oil$prices$(ICP)$in$the$period$of$
500.0
8.04 Jan[Jul)2018)USD67.2)per)barrel)
400.0 6.04 compared)to)USD48.4 in$the$same$
4.04
period$last$year.$
300.0 1.24
3.The$improvement$in$world$commodity$
2.04
200.0 prices,$especially$coal,$although$still$
(2.1)
0.04 limited,$amounted$to$USD97.7)per)
100.0
(2.0) ton)in)January[July)2018)compared$
0.0 (4.0)
to$USD81.7$per$ton$in$the$same$ period$
2015 2016 2017 2018 last$year.$
4.Increased)level)of)taxpayer)
compliance)in$paying$tax.
Oil4&4gas4
PPh4migas NonOoil4&4gas4
Pajak4nonmigas Kepabeanan4 dan4 Cukai Pertumbuhan4
Customs4&4excise Growth
income44tax income44tax
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 17
Customs)and)Excise)Revenue)Growth)until)July)2018)
It)is)the)highest)in)the)last)three)years
triliun8Rp
Trillion& Rupiah %
persen
100,0 92,9 20,0
90,0 86,2 16,4
79,8 15,0
80,0 73,4
10,0
70,0 8,7
60,0 5,0
50,0 0,0
40,0 (5,0)
30,0 !7,9
(10,0)
20,0
!14,9 (15,0)
10,0
0,0 (20,0)
2015 2016 2017 2018
Cukai
Excise Bea8Masuk
Import&duty Bea8Keluar
Export&duty Pertumbuhan
Growth
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 18
In)the)Last)Three)Years,)the)Absorption)of)Ministries/Govt
Institutions)Expenditures)until)31)July)2018)Continues)to)Increase
…while) the)absorption)rate)of)Non)K)/)L)Spending)tends)to)be)stable
TrillionRupiah
Triliun Rupiah Chart%Title % Trillion Rupiah
Triliun Rupiah Chart%Title %
900,0% 50,0% 700,0% 60,0%
800,0% 44,4% 45,0% 52,9%
600,0% 50,2% 50,0%
39,7% 41,2% 40,0% 47,7% 48,5%
700,0%
35,0% 500,0%
600,0% 32,8% 40,0%
30,0% 400,0%
500,0%
25,0% 30,0%
400,0% 300,0%
20,0%
300,0% 20,0%
15,0% 200,0%
200,0% 10,0%
100,0% 10,0%
100,0% 5,0%
! ! ! !
2015 2016 2017 2018 2015 2016 2017 2018
Budget
APBN/P Realization until&end
Realisasi%s.d% of July
akhir%Juli %&of Budget absorption (RHS)
%%penyerapan%(RHS) Budget
APBN/P Realization until&end
Realisasi%s.d% of July
akhir%Juli %&of Budget absorption (RHS)
%%penyerapan%(RHS)
Factors&affecting&the&absorption&rate&of&K&/&L&expenditurt:&
1. Continuation&of&the&policy&of&accelerating&the&implementation&of&activities&through early4auctione&
2. Acceleration&of&distribution&of&social&assistance&such&as&PBI,4PKH,4and4Bidik Misie
3. THR4payment4for4civil4servants4conducted&at&the&end&of&semester&I&2018e
4. Implementation&of&several&strategic4agendas4such&as&simultaneous&local&election&and&Asian&Games&preparation.
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 19
Increased)Absorptive)Capacity)in)Non[Physical)DAK)and)Village)
Funds)
Slowing)absorption)capacity) on)Physical)DBH)and)DAK
60,0
52,1 53,0 270,0 66,9 67,0 30,0
39,5
45,0
38,4
52,0 40,0
260,0 66,9
50,0 25,0
51,0 29,4 30,9 35,0
66,8
Rupiah
Rupiah
Rupiah
Persen
Persen
Persen
TriliunRupiah
49,2 66,7
Rupiah
Rupiah
50,0
48,5 66,7
Percent
66,6 25,0
Percent
Percent
240,0 66,5 15,0
Triliun
30,0 49,0
Triliun
48,0
Trillion$
Trillion$
66,6 20,0
Trillion$
48,0
20,0 230,0 10,0 15,0
66,5
47,0
10,0
10,0 220,0 5,0
52,8 53,6 49,7 43,2 46,0 235,3 256,4 266,8 267,3
66,4 23,2 26,4 26,7 19,3 5,0
Triliun Rupiah
Triliun Rupiah
Rupiah
Rupiah
Persen
58,0 Persen 25,0 50,0
50,0
Percent
57,0
Percent
20,0 40,0
Trillion$
40,0
Trillion$
54,8
56,0
30,0 15,0 30,0
55,0
20,0 10,0 20,0
54,0
10,0
56,3 73,3 66,1 71,7 53,0
5,0
14,7 27,3 35,8 35,9 10,0
- 52,0 - -
2015 2016 2017 2018 2015 2016 2017 2018
Real$31$
Real July
31 Juli %$absorb
% serap Real$31$
Real 31 JuliJuly % %$absorb
serap
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 20
Financing4 Plan4For42018
Creating4prudent4and4sustainable4fiscal4management
Government4Securities4to4Meet4State4Budget4Financing Issuance4Targets4for4Government4Securities
Indicative Budget4Target
25%&)
Instruments IDR4tn USD4bn 30%
Budget4Deficit4(2.19% of4GDP) 325.9 24.3
Financing 399.2 29.8
Government4Securities4(Net) 406.4 30.3
Government4Securities4(Gross) 834.3 62.3 70%&)
75%
Composition Government&Debt&Securities
Domestic&&Government&Securities 80&) 83% Alternative4of4Issuance
International Government&Securities 17&) 20%
Private4 Book4
Domestic4Government4Securities Auction
Placement Building
Weekly4Auction:
Conventional&securities 24)25x
Government4Securities4Financing4Realization
Realization4 %4Realization4
Islamic&securities 24)25x Budget4 2018 (as4of4May,4 to4Budget4
NonOAuction 2018) 2018
USD4 USD4
IDR4tn IDR4tn
Retail&Bonds&and&Retail&Sukuk bn bn
Based on& Government4 securities4(net) 406.4 30.3 190.8 14.2 46.9%
Private&Placement
request
Government4 securities4(gross) 834.3 62.3 434.9 32.5 52.1%
Target4avg.4tenor4maturity4for4Government4Securities4Issuance
Government4 debt4securities4(GDS) 602.24 44.9 303.24 22.6 50.4%
7O84years
International4Government4Securities ) Domestic&GDS 504.3& 37.6 205.3& 15.3
• USD Avoid&crowding&out&in&domestic&market ) International&bonds 103.8& 7.3 98.0& 7.3
• Sukuk USD Government4 Sukuk 232.14 17.3 131.74 9.7 56.8%
Provide&benchmarks&for&corporate&&bonds
• EUR
Diversify&investor&base ) Domestic&Government sukuk 190.7& 14.2 85.7& 6.7
• JPY
) Global&Sukuk 41.4& 3.0 41.4& 3.0
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 21
3.)Fiscal)Policy)and)the)2019)Budget)
Medium)Term)Fiscal)Framewok
Focusing)on)quality)and)productive)spending,)expanding)fiscal) space)and)sustainability
Budget
Description (%4GDP) 2019** 2020 2021 2022
2018
Revenue4 &4Grants 12.76 12.7&– 13.5 12.7&– 13.9 13.5&– 14.0 13.6&– 14.4
Tax4Ratio* 11.6 11.4&– 11.9 11.4&– 12.5 11.6&– 13.0 11.8&– 13.6
Total4Spending 14.95 14.2&– 15.4 14.3&– 15.6 15.0&– 15.7 15.1&– 16.0
Capital4Expenditure 1.4 1.5 ) 1.7 1.8&– 2.3& 2.2&– 2.7 2.3&– 3.0
Primary4Balance (0.59) 0.05 )(0.30) 0.05&– 0.01 0.10 – 0.01 0.1&– 0.05
Budget4 Deficit (2.19) (1.6) ) (1.9) (1.6) ) (1.7)& (1.5) ) (1.7) (1.5) ) (1.6)
Debt4 Ratio 29.07 28.8 – 29.2 28.50&&) 28.61 27.81 – 28.30 26.25 – 27.87
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 23
Macroeconomic)Indicators)that)Form)the)Basis)for)Calculating)
the)2019)Budget)Draft
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 24
Budget&Draft&2019
Budget&Draft&2019
Budget&Draft&2019
Budget& Draft&2019
the&budget&deficit&in&2019&is&directed&towards&further&decline
Central&
Tax decreased&primary&balance&is&getting&closer&to&positive Government& Local&Govt &&
Non)Tax Expenditure Village&Fund
Grant
Budget4Financing
Government&
Revenue Government&
Expenditure
Investment
Debt&financing
financing
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 25
Budget)Deficit)is)Going)Down)and)Primary)Balance)towards)Positive)
Direction))))
Outlook RAPBN
Budget$
Outlook RAPBN
Budget$ 2012 2013 2014 2015 2016 2017 2018 2019Draft$2019
Rp Tn
Triliun$Rp 2012 2013 2014 2015 2016 2017 2018 Draft$2019
2019
./ ./ ./ ./
(21,7)
.(20,0)
.(50,0)
(52,8) (0,13) .(0,20)
.(0,50) (64,8)
.(40,0)
.(100,0)
(226,7) (98,6) (93,3) .(0,40)
(153,3)
(211,7) .(1,00) .(60,0) (125,6) (124,4)
.(150,0) (298,5) (297,2) .(0,60)
(308,3) (314,2) (142,5) (0,44)
(341,0)
.(80,0)
.(200,0) .(1,50)
(1,86) .(0,80)
.(100,0) (0,64)
.(250,0)
.(2,00) (0,92) .(1,00)
.(120,0)
(2,33)
.(300,0)
(1,84) (0,92)
(2,25) .(140,0) (1,09) .(1,20)
(2,12) .(2,50) (1,01)
.(350,0) (2,49) (2,51) (1,23)
(2,59) .(160,0) .(1,40)
.(400,0) .(3,00)
Keseimbangan.primer.(RHS)
Primary$balance$(RHS)
Budget$ Deficit$to$GDP$(RHS)
Defisit.Anggaran
Deficit
Defisit.terhadap.PDB.(%)./.RHS Primary$balance$deficit$to$GDP$(%)
Defisit.Keseimbangan.Primer.terhadap.PDB.(%)
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 26
Balance)between)Physical)Development)and)HR,)Central)and)
Regional)Development,)and)Progressive)Taxes
Taxes)Become)an)Incentive)to)Maintain) Strengthening)and)Balance)of)Physical)
the)Purchasing) Power)of)Society)&) Development)and)HR
Economy
Infrastructure$ Budget
• Increase of • Deduction of 2015$:$Rp256,1$T 2019$:$Rp420,5$T
non–taxable income tax rate Education Budget
income for SMEs to 2015$:$Rp390,1$T 2019$:$Rp487,9$T
•2013:$24.3$ 0.5% Health Budget
millions Rupiah 2015$:$Rp65,9$T 2019$:$Rp122,0$T
•2016:$54.0$ Social Protection Budget
millions Rupiah 2015$:$Rp249,4$T 2019$:$Rp381,0$T
2015$:$Rp623,1$T 2019):)Rp832,3) T
consider$investment$ value,$
Pioneer industry export$orientation,$and$ balance
employment Central govt (K/L)
2015:$Rp732,1$T 2019):)Rp840,3) T
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 27
Tax)Revenues)is)the)Main)Source)of)State)Expenditures
500,0 80,0
2,500.0) 2.142,5)
429,1
403,0
1.903,0) 16,9% 380,9 387,4
2,000.0)
1.666,4)
400,0 58,5 359,3 60,0
1.550,5) 1.508,0) 1.555,9) 18,3% 49,0
1,500.0) 18,7%
25,7% 17,0% 16,8% 300,0
31,7 255,7 40,0
223,2
1,000.0)
83,1% 200,0 20,0
82,3% 82,6% 80,6%
81,4% 140,8 14,6 5,8
74,0%
500.0)
100,0 (7,3) 0,0
0.0)
6,5 (9,7)
2014 2015 2016 2017 outlook) RAPBN) 0,0 !20,0
2018 2019
2012 2013 2014 2015 2016 2017 outlook RAPBN
Non[tax
Penerimaan)perpajakan
Tax)revenue PNBP
revenue
Hibah
Grant
2018 2019
Pembi ayaan Utang
Debt)financing Growth
(RHS) (RHS)
Growth)
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 28
The)2019)Budget)Draft)to)Encourage)Investment)and)
Competitiveness)through)Human)Resource)Development
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 29
4.)Policy)for)Sustainable) Development
Government)Commits)to)Qualified)and)Sustainable)Development
Improving)economic)competitiveness) and productivity)while)maintaining) stability
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 31
Structural)Reforms)to)Support)Economic)Fundamental)
…to)boost)FDI,)consumption,)and)export
Tax Incentive for several sectors to advance the sectors and tax incentive for
several zones to reduce disparities among regions and bolster regional
economic growth
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 32
Tax)Reform)has)been)Implemented)since)2015)
…through)policy)strengthening)and)organizational)improvement
Tax Amnesty
• Uang$ tebusan$
Increasing NonBtaxable mencapai$ 1%$PDB
Income
• From Rp24.3) milliom
2019
(2013))to Rp54)miilion 2018
2017
Income Tax Relief$on
Asset Revaluation Reducing MSMEs tax to 0.5%$
2016 •
• Accelerating restitution
• AEoI implementation
• Targeted incentives
• Increasing tax amnesty • Compliance$Risk$
• Confirmation on tax
compliance Management$ (full)
payer status
Compliance Risk Management
2015 •
(rollBout)
• IT$enhancement
Tax Reform
Organization Human)Resources IT)and)Database Business)Process Regulation
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 33
Tax)Incentives)to)Boost)Export)and)Investment
Tax)
Allowance
for) Tax)Incentive)Policy
Investment
• Tax&deductions&to&support&the&
Income)Tax)
Deduction)
development&of&certain&
Provision)of)
for)Pioneer) Import)Duty) sectors&(pioneers),
Industry Facilities
• Tax&allowances&to&support&
Tax) additional&investment,
Incentives
,& • Tax&reduction&to&support&R&&&
D&and&vocational&activities.
Export) Special)Zone
Facilities
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 34
Tax)Holiday)Facilities)(Revised)Regulation)
Changing)of)mindset)to)support)investment) through)attractive) incentives) and)simplified) procedure)on)CIT)
OLD NEW
Describtion PMK)103/2015 PMK)35/2018
Subject New$Tax$Payers New$Investments
Deduction 100%
10B100%
Percentage (single rate)
Duration) Investment plan)(Billion)IDR)
(Years)
5 500bn$to <$1tn
5B15$years
Can$be$extetended to$20$years$ 7 1tn$to$<$5tn
Duration
with$Minister$(MoF)$discretion$ 10 5tn$to$<$15
15 15tn$to$<$30tn
20 Minimum$30tn
8$Scopes$on$Pioneer$
Industry Scope 17$Scopes$of$Pioneer$Industries
Industries
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 35
Deduction)of)Income)Tax)Rates)for)SMEs
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 36
Taxation)policies)also)contribute)to)improving)the)investment)
climate)and)ease)of)doing)business
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 37
Allocating)More)on)Productive)Spendings
Committed)to)strengthen)human)capital) through)infrastructure,) education)and)health)spending
Infrastructure4Allocation4(more4than418%4of4Spending4in4the4last4two4years)
Infrastructure4acceleration4to4tackle4regional4and4global4
challenges
2014: 2015: 2016: 20174 : 2018: Target4:4
154.7 256.1 269.1 400.9 410.4 • Road:&856&km
• Railway:639&km’sp
• New&airports&in&15&locations
• Irigation:781&km
• Electrification&ratio:&95.15%e
Health4Allocation4(5%4of4Spending) • Housing:&7062&unit
2018:
Focuses:4improving4supply4side,4better4access,4service4quality,4
2017: promoting4preventive4action,4and4maintain4JKN4sustainability.
2016: 111.0
104.9
2014:
2015: 92.3 Policies4direction
65.9
59.7 • Improving distribution&of&health&facilities&and&health&personnel
• Strengthening&promotive and&preventive&programs
• Improving the&effectiveness&and&sustainability&of&the&national&health&
insurance&program
• Increasing&the&role&of&local&government&for&supply&side&as&well&as&service
Education4Allocation4(20%4of4Spending) side
2018: Focus4on4improving4access,4distribution,4and4quality4of4
2014: 2015: 2016: 2017: 444.1 education
353.4 390.1 370.4 419.8
Policies4direction
• Improving&access,&distribution,&and&quality&of&education
©"hamdanhasan.deviantart.com
• Improving&school&facilities&and&infrastructure
• Synergy&between&Central&and&Local&Government
• Strengthening&vocational&education&and&link&and&match&curriculum
• Widening&access&(BOS,&PKH,&PIP,&Bidik Misi and&DPPN)&for&sustainable&
education
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 38
Strategy4to4Improve4Infrastructure
Collaboration)among)state)budget,)SOE)budget)and)private)sector
Developing) new)ways)to)attract)infrastructure)investment
• Allocating$more$money$ Infrastructure)Needs)by)Sector)2015)[ 2019)(in) Area)of)infrastructure)financing)
does$not$necessarily$ trillions)Rupiah) alternative
mean$an$increase$in$
STATE) REVENUE
infrastructure$quality.$ 1.000 591 733 328 507
The$capacity$and$quality$ Tax$Allowance,$Tax$Holiday,$Fiscal$
of$spending$relation$ Incentives
does$not$align$perfectly.$
Above)the)line
STATE) EXPENDITURE
• For$infrastructure$ Line)Ministries
spending,$Indonesia$ ELECTRICITY PORT ROAD S HOUSING OIL & GAS (Ministry$of$Public$Works,$Ministry$of$
should$invite$more$ Transportation,$Ministry$of$Energy, etc)
private$capital$(through$ 226 144 987
PPP).$ Infrastructure$
280
Non)Line)Ministries
funding$gap,$is$expected$ (o/w.$VGF,$PDF,$grants,$PSO)
to$be$potentially$fulfilled$
by$either$SOE$&$Private$ Transfer) to)the) Regions) &)Village)Fund
Sector (o/w.$DAU$(25%),$Physical$DAK,$Village$
OTHERS Fund)$
TELCO)&IT TRAIN S AIRPORT
Update)on)PPP)Projects FINANCING
Below)the)line
Revolving$Fund$(o/w.$FLPP),$Project$based$
Total
No Status Sector bonds$(e.g.$SUKUK),$Capital$injection$in$PT$
projects
SMI$&$PT$IIF$(financing)$as$well$as$PT$IIGF$
1. Financial&Close 74 Electricity&, water&and&sanitation,&toll&road,& (guarantee),$Subsidiary$Loan$Agreement,$
telecommunication Guarantee,$Investment$(capital$injection)$in$
2.& PPP agreement 84 Toll&road SOE,$Capital$injection$in$BLU$LMAN for$land$
clearing
3.& On transaction 3 Water&supply and&toll&road
4.& FBC&(under project& 6 Transport, health facility, toll&road,&water&supply
development&fund)
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 39
Solid)Policy)Coordination)in)Managing)Financial)Markets)Volatility
State$General$Treasury$Account$ (Rekening$
NORMAL AWARE ALERT CRISIS KUN)$ (min.$level$Alert)
State) Budget
Accumulated$cash$surplus$(SAL)$ (min.$Level$
Crisis)
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 40
Thank4you
Fiscal4Policy4Agency
Ministry4of4Finance
The4Republic4of4Indonesia