MINISTRY OF FINANCE

REPUBLIC OF INDONESIA

RECENT
MACROECONOMIC
AND FISCAL UPDATE
MINISTRY OF FINANCE
March 2023
MINISTRY OF FINANCE
REPUBLIC OF INDONESIA

The Team
Investor Relation Unit

Abdurohman
Director for Center of Macroeconomic Policy

Rahadian Zulfadin Eko N Saputro

Senior Analyst Senior Analyst

Putri Rizki Yulianti Andi Yoga Trihartanto

Analyst Staff

Should you have further questions, please do not hesitate to contact us:

https://fiskal.kemenkeu.go.id/informasi-publik/investor-relation-unit

IRU@kemenkeu.go.id
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REPUBLIC OF INDONESIA

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MINISTRY OF FINANCE
REPUBLIC OF INDONESIA

01 GLOBAL UPDATE & RISKS

THE GLOBAL ECONOMY FACED TOUGH CHALLENGES IN 2022
Major countries experienced slowed growth in 2022, and prospects for 2023 remain uncertain due to various risks,
such as geopolitics, limited fiscal resources, high interest rates, and pressure on the Chinese property sector Indonesia's growth was among
the strongest in 2022

Global US Realization/Outlook of Economic

Growth in 2022
10.0 10.0
% yoy *) IMF Outlook
8.0 8.0
6.2 5.9 SAU* 8.7
6.0 6.0
3.4
MYS 8.7
4.0 4.0
2.1 PHL 7.6
2.8 2.9
2.0 2.0 2.3 VNM 7.0
1.4
0.0 0.0 IND* 6.8
–2.0 –2.0
IDN 5.3
–3.0 –2.8 GBR 4.0
–4.0 –4.0
2019 2020 2021 2022 2023f 2019 2020 2021 2022 2023f ITA 3.9
SGP 3.6
AUS* 3.6
China Eurozone CAN* 3.5
10.0
8.1
10.0 EUR 3.5
8.0
8.0 BRA* 3.1
5.3
6.0 CHN 3.0
6.0 6.0 3.5
5.2 4.0 MEX 3.0
4.0 3.0 2.0 KOR 2.6
1.6
0.0 0.7 FRA 2.6
2.0 2.2
–2.0 ZAF* 2.6
0.0
–4.0 THA 2.6
–2.0 –6.0
–6.4
USA 2.1
–4.0 –8.0 DEU 1.8
2019 2020 2021 2022 2023f 2019 2020 2021 2022 2023f JPN 1.1
5
Source: Bloomberg & IMF
 GLOBAL GROWTH OUTLOOK HAS WEAKENED, CLOUDED BY SOME
UNCERTAINTIES
Despite moderating, inflation is still high for
Global growth has weakened
longer...
Global Growth IMF Jan '23 Global
% yoy Inflation
% yoy, average 8.8

6.4 6.6
6.2
3.7 3.4 2.9 3.1 4.3
3.6
2.8
-3.0
avg 2010- 2020 2021 2022e 2023f 2024f
avg 2010-2019 2020 2021 2022e 2023f 2024f 2019 (pre
(pre pandemi) pandemi)

Downside
 Increased geopolitical tensions
risks
 Global inflation remains high
 Interest rates will be high for longer
 Narrower policy space (fiscal and
monetary)
 Moderation of commodity prices
 China’s opening
 New source of growth: green
economy, digitalization,
Upside risks healthcare industry etc.

Sumber : IMF, OECD, & World Bank 6

 COMMODITIES PRICES HAVE BEEN DECELERATING
Affected by slowing global demand
Natural gas and oil prices on a declining trend, whole coal remains high due to demand shift to this commodity in many countries

Natural Gas 5dma (US$/MMBtu) Coal 5dma (US$/Metric Ton) Brent 5dma (US$/barrel)
7 500 2022 YoY 150 2022 YoY
2022 YoY
157% 431.1 130
8% 126.0
18%
6 5.70 400 2023 YTD
2023 YTD 110
2023 YTD
-53.0% -12.2%
5 -44.0% 300 90
86.6
200 261.9 70 74,4
4 4.39
180,4 50
100
3
30
0
2.21 10

M-…

M-…

M-…
F-21

F-22
A-20

A-20

A-21

S-22
N-20

N-21

D-22
J-20

M-21

M-22

M-23
2

F-21

F-22
A-20

A-21

A-22
N-21

N-22
O-20
J-20

J-20
F-21

F-22
A-20

A-20

A-21

A-22
N-20
J-20

M-21

N-21

M-22

D-22

M-23
Food commodity prices show volatility. CPO and wheat prices were lower than the previous period, while soybean and corn prices were still high.

CPO 5dma (US$/Ton) Wheat 5dma Soybean 5dma (US$/bu.) Corn 5dma (US$/Bushels)
1400
(US$/Bushels) 1650
2100 2022 YoY 1,547.7 800 2022 YoY
2022 YoY
1,779.7
2022 YoY 1226.8 1500
20% 13.7%
1800 -27% 1200
4.5% 700
1,447.1 2023 YTD
2023 YTD 1350 2023 YTD
1500 1000 2023 YTD
-7.5% -6,9% 617.9
-2.7% -16.4% 600
1200
1200
902.5 800
500
900 1050

600 674.3
600 900 400

300 400 750 300

F-21

F-22
A-20
A-20

A-21

A-22
N-20

N-21

D-22
M-21

M-22

M-23
J-20
F-21

F-22
A-20
A-20

A-21

A-22
N-20

N-21

D-22
M-21

M-22

M-23
J-20

F-21

F-22
A-20
A-20

A-21

A-22
N-20

N-21

D-22
J-20

M-21

M-22

M-23

F-21

F-22
A-20
A-20

A-21

A-22
N-20

N-21

D-22
J-20

M-21

M-22

M-23
7
Sources: Bloomberg, UN, Reuters data as of 24 March 2023
 0
3
6
9
3
7

12
15
15

11

(3)
(1)
3
7
11
15

(1)
F-20 M-20
M-20
M-20
J-20 J-20
A-20
S-20
N-20
N-20
D-20

Source: Bloomberg, processed

F-21 M-21 M-21
M-21 J-21
J-21
A-21 S-21
USA

Japan
N-21

Europe
N-21 D-21
F-22 M-22 M-22
M-22 J-22
J-22
A-22 S-22
N-22 N-22 D-22
6.0

F-23 M-23

3.0
8.5

3.3
5.0

M-23

(0.10)
0
3
6
9
3
7
0
3
6
9

12
15
15
12
15

11

(1)

F-20 F-20 F-20

M-20
J-20 J-20
ARE STILL ABOVE THEIR POLICY RATES

A-20
O- O-20
20 N-20
Inflation Rate (% yoy)

F-21 F-21 F-21

INFLATION RATES IN ADVANCED ECONOMIES

M-21
J-21 J-21
A-21
O-
India

O-21
China

21 N-21
Indonesia

F-22 F-22
F-22
M-22
J-22 J-22
A-22
O- N-22 O-22
22
policy rates.

F-23 F-23
6.5
6.4

F-23
3.65

5.5
1.0

5.75
Policy Rate (% yoy)

0
5
10
15

0
0
3
9

5
10
15
6
12
15

F-20
F-20 F-20
M-… J-20
J-20
A-20
O-20 O-20
N-20
F-21 F-21
F-21
M-… J-21 J-21
In EMDEs, inflation levels are below the

A-21
Brazil

O-21 O-21
Mexico

N-21
South Africa

F-22 F-22
F-22
M-… J-22 J-22
A-22
O-22 O-22
N-22
F-23 F-23
F-23
6.9
7.0
7.6
5.6
13.75

11.0

8
 GLOBAL MANUFACTURING IMPROVED BUT IS NOT YET IN AN EXPANSIONARY ZONE
Indonesia is still in the expansion zone, China and Vietnam are recovering, while most of the major economies are still contracted

PMI Manufacture as of February 2023

Major Countries Selected Asian Countries

65 65

60 60

55 55

50 50

45 45

40 40

threshold Global US Eurozone China threshold Indonesia Malaysia Vietnam India

Expand - Expand - Slowing Recovered Contracted

Accelerating 45.5%
27.3%
13.6%
Distribution of
February
Manufacturing PMI 13.6%
Performance in the Thailand, India, Indonesia, China, Vietnam, Mexico US, Eurozone, UK, Germany, France
Australia, Russia, Philippines Japan, Brazil, Malaysia, South Korea,
G20 and ASEAN-6 Italy, Canada, South Africa
(minus SAU, ARG, SGP) Turkey
(PMI above the 50 threshold or in (PMI above the 50 threshold or in (PMI below the 50 threshold or in a
(The PMI was at an expansionary
an expansionary level & higher an expansionary level but lower level from the previous month's contractionary level)
than previous month) than previous month)
contractionary level) 9
Source: Bloomberg, IHS Markit
THE MOST RECENT SHOCKS COULD ESCALATE THE RISK
SVB Collapse and Closing Signature Bank in the US Illustrates Some Unintended Consequences of Fast Liquidity Tightening

SVB & Signature Banks’ Chain of Events

Increased
Client SVB Value of Surge of Joint
Deposits invested in SVB withdrawals Client SVB face Responses
in SVB low risk investment as private confidence liquidity by US
due to assets (eg fell as fundraising plunged & issue & Treasury,
tech UST & interest rate becoming induce panic collapse The Fed, &
MBSS) increases costly FDIC
companie
s boom

Global Volatility Index

180 90
MOVE Index
160 80 The US Bond
VIX Index (RHS) and Stock
140 70 Market began
120 60 to show
increased
100 50 volatility after
the February
80 40
FOMC and the
60 30 volatility is
seemed to
40 20 increasingly
20 10 escalated since
the beginning
0 0 of March
Mar-22

Apr-22

Oct-22

Mar-23
Jul-22
Jan-22

Jun-22

Aug-22

Jan-23
May-22

Dec-22
Feb-22

Sep-22

Nov-22

Feb-23
101010
MINISTRY OF FINANCE
REPUBLIC OF INDONESIA

02 INDONESIAN ECONOMIC OVERVIEW

STRONGER ECONOMIC RECOVERY IN 2022
Economic Growth (%,yoy) Expense Growth (%) • Throughout 2022,
Source: BPS Source: BPS
economic growth was
above 5% in each
7.1 -2.6
Household consumption
Kons. Rumah Tangga 2.0
quarter.
5.4 5.7
5.0 5.0 share: 51,9% 4.9
• Public consumption
3.7 5.3 Government 2.1
continues to strengthen.
3.0 Fiscal support in dampening
3.5 Kons. Pemerintah
consumption 4.2
share: 7,7% -4.5 price pressures was effective
in maintaining purchasing
power stability.
Gross Fixed Capital -5.0
(0.7) PMTB
Formation 3.8 • The downstream of natural
-2.1 share: 29,1% 3.9 resources was one of the
(2.2)
main sources driving export
-8.4 performance in 2022.
(3.5) Ekspor
Export 18.0
share: 24,5% 16.3 • Investment is relatively
(5.3) stable and will continue to
-17.6
be encouraged by the
Import
Impor 24.9 creation of a better
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 investment climate and
share: 20,9% 14.7
2020 2021 2022 strengthening the
downstream.
2020 2021 2022
12
 THE ECONOMY RECOVERS PREVALENT IN ALL SECTORS
(BROAD-BASED)
The growth on production side (%)
(2.9)
Manufaktur
Manufacture 3.4
share: 18,3%
4.9
(3.8) 2020
Perdagangan
Trade 4.6
5.5
• The manufacturing and trade
share: 12,8%
1.8 2021 sectors have regained, in line
Pertanian
Agriculture 1.9
with the increasing demand for
share: 12,4%
2.3 2022
(2.0) manufactured products such as
Pertambangan
Mining 4.0
4.4 steel, machinery, and electronic
share: 12,2%
(3.3) devices from the global market.
Konstruksi
Construction 2.8
2.0
share: 9,8%
(15.1)
Transportasi
Transportation
Transportation 3.2
share: 5,0%
19.9 • The accommodation & food
ICTInfokom 6.8
10.6 and drink and transportation
share: 4,1%
7.7 sectors grew high, in line with
2.3
Real Estate
Real Estate 2.8 the relaxation of PPKM policies
share: 2,5% 1.7 and the return of foreign tourists
(10.3)
Accommodation, F&B
Akomodasi, Mamin 3.9 to Indonesia.
share: 2,4% 12.0

Source: Statistic Indonesia 13

ECONOMIC RECOVERY STRENGTHENS IN ALL REGIONS

KALIMANTAN
The economies of Sulawesi,
GDP Distribution 2022 (%)
2020 2021 2022
SULAWESI Java, and also Maluku &
SUMATERA
2020 2021 2022 Economic Growth %YoY Papua grow above national
2020 2021 2022 economy (yoy).
9,2 7,0
4.9 MALUKU
3.2
& PAPUA
3.2
4.7
7.1 Downstreaming in mining
-2.3 5.7 industry boosted the
-1.2 economy in the eastern
22,0 2020 2021 2022
0.2 2,5 Indonesia Sulawesi, Maluku,
& Papua.

1.5 10.2 8.7 Java is mainly supported by

2020 2021 2022 trade and information &
JAVA 3.7 5.3 5.1 communication sectors in the
-2.5 0.1 three big provinces (DKI
BALI & 2,7 Jakarta, East Java & West Java).
56,5 -5.0 NUSA
TENGGARA
Bali & Nusa Tenggara
continue to improve as
2020 2021 2022
mobility easing and tourism
revival
Source: Indonesia Statistic Agency, 2023
14
 QUALITY GROWTH • Strengthening social safety nets program
• Improving human capital quality
PERFORMANCE • Driving productive and high-value-added
Creating jobs & lifting people out economic activities, including MSMEs
of poverty
Unemployment Rate Poverty Rate
Unemployment (Mn People) Unemployment Rate (rhs,%) Poor People (Million) Poverty Rate (rhs,%)
12 8 29 12

7.1
7 28 11
10

7 27 11
10.2
8

6 26 10
9.6
6
5.9 6 25 10
5.2 9.2
4
5 24 9

2 23 9
5

7.6 7.0 7.0 7.0 7.0 9.8 9.1 8.4 28.5 27.8 26.6 25.7 24.8 27.6 26.5 26.4
0 4 22 8

2015

2016

2017

2018

2019

2020

2021

2022
2015

2016

2017

2018

2019

2020

2021

2022

15
Source: Statistics Indonesia
 INFLATION REMAINS BENIGN DESPITE INCREASING IN FEBRUARY 2023
Various policies continue to be implemented to ensure price stability

INDONESIA’S INFLATIONARY RATE (%, YOY) COUNTRIES’ INFLATION (%, YOY)

16.0 China 1.0

IHK
CPI Core Administered Price Volatile Food Saudi Arabia 3.0
14.0 Japan 3.3
Malaysia* 3.7
12.2 Thailand 3.8
12.0
Vietnam 4.3
South Korea 4.8
10.0 Canada 5.2
Indonesia 5.5
7.62 Brazil 5.6
8.0
US 6.0
6.0 France 6.3
6.0 5.7 5.5 Singapore 6.3
4.9 4.7
5.4 5.5 5.3 India 6.4
4.0
South Africa 7.0
3.1 Mexico 7.6
Europe 8.5
2.0 Philippines 8.6
Germany 8.7
0.0 Italy 9.1
Jan Feb Mar Apr Mei Jun Jul Ags Sep Okt Nov Des Jan Feb Mar Apr Mei Juni Juli Ags Sep Okt Nov Des Jan Feb UK 10.4
2021 2022 2023 Russia 11.6

16
Source : BPS, Bloomberg, & CEIC (processed) *January 2023 Inflation
INDONESIA'S BALANCE OF PAYMENTS IN 2022 CONTINUES TO
RECORD A SURPLUS
Current Account (USD Billion) Capital and Financial Account (USD
80 Billion)
50
60
40
40
30
20
20
0
10
-20
0
-40
-10
-60
-20
-80
-30
2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022
Barang
Goods Jasa
Services Pendapatan Primer
Primary Income Investasi
PortfolioPortfolio
Investment Investasi Langsung
Direct Investment Investasi Lainnya
Other Investment
Pendapatan
SecondarySekunder
Income Transaksi Berjalan
Current Account Derivatif
FinancialFinansial
Financial Derivatives
Derivatives Transaksi
FinancialFinansial
Account

• Balance of Payments (BOP) in 2022 recorded a surplus of USD 4 billion, supported by the continued strengthening of the current account, while
the capital and financial account recorded a deficit.
• Current account surplus is supported by export performance which continues to increase.
• Capital and financial account experienced a deficit mainly from portfolio investment due to increased global uncertainty. Meanwhile, Foreign
Direct Investment (FDI) maintained a relatively high surplus.
Source: Bank Indonesia 17
STRONGER EXTERNAL POSITION HAS BEEN BOOSTED BY DOWNSTREAMING
PRODUCTS
Strong export performance and commitment to developing downstream products

Current Account Balance (% of GDP) Comparison between 2014 and 2022 Exports
(USD Bn)

1.50
1.00 292.0
1.00

0.50 69.6
0.29 Iron & Steel
0.00 Increased by 48.96% (AAGR)
27.8
-0.50 176.0
26.2
-1.00 1.1
-1.50 Total
178.5 Manufacture
-2.00 118.6

-2.50
Manufacture (excl. iron
&steel)
-3.00 30.0 Increased by 5.24% (AAGR) 16.0
-3.50 2014 2022
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022 Oil & Gas Manufacturing Iron and Steel Others

 The increase in export performance was driven by rising commodity prices and also natural resources downstream products
 remain vigilant over the impact of the global economic slowdown, particularly on some manufactured products.
 Export diversification (markets and products) needs to be encouraged, including strengthening downstream
Source: Statistics Indonesia 1818
 TRADE BALANCE CONTINUES TO RECORD SURPLUS FOR 34 MONTHS
Export performance at the beginning of 2023 continued its positive trend

TOTAL GROWTH OF EXPORTS TO MAJOR TRADING PARTNERS, AS OF

Indonesia’s Export and Import Indonesia (USD Billion) February 2023
30.00
Export
Ekspor Feb'2023 (yoy) 2022 (yoy) 2021 (yoy)

Import
Impor 13%
21.40
20.00 India 76%
28%
15.92 14%
Filipina
Philippines
50%
10.00 46%
-10%
Korea Selatan
South Korea 43%
38%

Japan -2% 39%

- 31%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F*
2020 2021 2022 2023 Singapore -2% 24%
9%

8.00
Indonesia’s Trade Balance (USD Billion) -5%
Malaysia 29%
48%
6.00 5.48
Taiwan -4% 25%
70%
4.00
Vietnam 20%
21%
2.00 39%

China 23% 39%

- 69%

-2.00 United States -20% 9%

38%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F*
2020 2021 2022 2023 Total
Total 10
10 countries
Negara 5% 26%
42%
19
Source : Statistics Indonesia (processed)
 NEAR-TERM PROSPECT REMAINS PROMISING
Indonesia’s PMI Manufacture has been in the Consumer Confidence Index stable at a high level,
expansive zone for 18 months in a row 140
indicating economic confidence going forward that is still
optimistic
130 122.4
120
51.2
110
Consistently expands in 100
Optimistic threshold
18 months.
90
80
70
J F M A M J J A S O N D J F M A M J J A S O N D J F J F M A M J J A S O N D J F M A M J J A S O N D J F
2021 2022 2023 2021 2022 2023

Credit Growth (Consumption, Investment, and Vehicle sales for car and motorcycle (wholesale, %
150
Working Capital still at a high level
15%
yoy) continue to show high growth
130
11.4%
Investment 110 Car Sales Mobil
Penjualan
10% 10.1% 90
Working Capital Motorcycle
Penjualan Sales
Motor
70 56.3
5% Consumer 9.3% 50
30 7.4
0%
10
-10
-5%
-30
-10% -50
J F M A M J J A S O N D J F M A M J J A S O N D J F
M

J
N

N
S

S
2021-J

2022-J

2023-J

2021 2022 2023

20
 INDONESIA’S FINANCIAL MARKET REMAINS STABLE DESPITE
INCREASING GLOBAL VOLATILITY
Global Volatility Index
VIX MOVE (rhs) Exchange Rate 2023 (%, ytd 16
40 250 March)
35
200 MEX 3.8
30
25 150 BRA 2.4
20 PHL 1.5
15 100
IDN 1.2
10
50 USA 0.9
5
0 0 THA 0.6
Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23
GBR 0.5
VNM 0.2
Capital Flow Indonesia (10 March 2023) Yield Spread LCY vs UST 10Y (YTD, bps)
SAU 0.1
Foreign Flow (Equity) Foreign Flow (Bond) 1200 Januari 2022 Desember 2022 13-Mar-23 IND 0.0

969
Net Inflows/(Outflows)

942
CHN 0.0
60 1000

881
Cummulative YTD RUS 0.0

815

763
50 (Rp tn) 37.22
800 SGP -0.4

691
40

604
EUR -0.5

542
30 33.97 600

515
483
CAN -1.1
474

380
20
327

312
TUR -1.5

345
400
304

0.72
304
263
10 AUS -2.1
0.42
0 200 JPN -2.2
-0.30 3.25
-10 MYS -2.2
0
1-Feb
6-Feb
9-Feb
10-Jan
13-Jan
18-Jan
24-Jan
27-Jan

14-Feb
17-Feb
22-Feb
27-Feb
2-Mar
7-Mar
10-Mar
2-Jan
5-Jan

KOR -3.1
ID PH BZ IN SA MX 21
 ROBUST NATIONAL ECONOMIC RECOVERY BECOMES A
SOLID FOOTING AMID INCREASED GLOBAL RISKS IN 2023
National Economic Growth (YoY, %) %, yoy 2020 2021 2022 2023F
Source: Statistics Indonesia, MoF’s Estimate

6
5.0 5.1 5.2 5.0 5.3 5.3 Household Consumption (2.6) 2.0 4.9 4.9 - 5.3
4.9
5 Nonprofit Institution Cons (4.2) 1.6 5.6 7.8 - 8.2
4
3.7 5.0
Government Consumption 2.0 4.2 -4.5 0.8 - 1.2
3
2 Investment (5.0) 3.8 3.9 4.1 - 4.7

1 Export (8.1) 24.0 16.3 4.6 - 5.6

0
Import (16.7) 23.3 14.8 3.4 - 4.5
-1
GDP (2.1) 3.7 5.3 5.0 - 5.3
-2
-2.1
-3
International Agencies’ Forecasts of National Economic Growth
2015 2016 2017 2018 2019 2020 2021 2022 2023
2023 (WEO Jan-23): 2023 (GEP Jan-23):
4.8 4.8
• The pace of economic growth in 2023 will remain resilient
• Domestic household consumption will remain stable
2023 (ADOU Sep-22): 2023 (EO Nov-22):
• State spending is expected to stimulate and maintain economic stability 5.0 4.7
• The rate of investment is expected to improve, while export performance will
normalize 2023 (Consensus Mar-23):
4.8
22
 A WELL MAINTAINED INDONESIA’S SCR AMIDST GLOBAL AND DOMESTIC CHALLENGES
Indonesia's economic prospects have received appreciations from International Institutions
INDONESIA’S SOVEREING CREDIT RATING S&P upgraded Indonesia's outlook from negative to STABLE in line with rating
affirmations by Moody's, Fitch, R&I and JCRA:
Rating Agency
Sovereign
Outlook Assessment Date confirm the condition of strong economic fundamentals and positive prospects
Credit Rating
R&I BBB+ Stable 27 May 2022 • The Ability to absorb shocks from the pandemic without any negative impact on the medium-term
Indonesia economic trajectory
S&P BBB Stable 27 April 2022
Rating • The impact of the pandemic on Indonesia's fiscal is better than that of its peers, with a promising
JCR Agency BBB+ Stable 27 July 2022
Position fiscal consolidation scenario
Moody’s Baa2 Stable 10 January 2022 • Significant progress in returning to a moderate fiscal deficit and improving Indonesia's external
Fitch BBB Stable 14 December economic position
2022
Rating Action during the 2020-2021 Pandemic

30 Rating Upgrades
11 by Fitch
10 by Moody’s
161 Rating Downgrades
57 by Fitch
53 by Moody’s
109 Negative Outlook Revision
40 by Fitch
25 by Moody’s
9 by S&P 51 by S&P 44 by S&P

• During the pandemic, major rating agencies are rampantly taking action ratings the pandemic has had
a major impact, especially on fiscal conditions. More action ratings in 2020 than the 2008 GFC crisis
• In 2022, the three rating agencies have carried out 31 Rating Action Upgrades, 79 Rating Action
Downgrades and 32 Negative Outlook Revisions
Latest CRA’s rating on peer country

Malaysia Philippines Mexico South Africa India

S&P A- (Stable) BBB+Stable) BBB (stable) BB- (Positive) BBB-(Stable)
Fitch BBB+(Stable) BBB(Negative) BBB(Stable) BB-(Stable) BBB-(Stable)
Moody’s A3 (Stable) Baa2 (Stable) Baa2(Stable) Ba2(Stable) Baa3(Stable)
23
Source: Ministry of Finance
MINISTRY OF FINANCE
REPUBLIC OF INDONESIA

03 BUDGET UPDATES
 THE PANDEMIC PUT UNPRECEDENTED PRESSURES ON FISCAL POSITION
2023
2020 2021 2022
High Quality Fiscal
Extraordinary Policy Pandemic Handling & Recovery Accelerate Recovery & Reform
Consolidation
Budget Deficit (% GDP) Budget Deficit (% GDP) Budget Deficit (% GDP) Budget Deficit (% GDP)

1st 2nd
Revision
Revision Revision
(Perpres (Perpres (Perpres Preliminary Budget
Budget no.54) no.72) Realization Budget Realization Budget no.98) realization 0
0 0 0
-1
-1 -1 -1
-2
-2 -2 -2
-1.8 -3
-3 -3 -3 -2.4 -2.8
-4
-4
-4 -4
-5 -5
-5 -5 -4.5
-5.1 -4.6 -4.9 -6
-6 -6 -6
-7 -6.3 -6.1 -5.7 -7
-7 -7
-8 -8
-8
-8

Economic Recovery Program (PEN) Economic Recovery Program (PEN)

allocation allocation
IDR 575.9 Trillion IDR 655.1 Trillion

Reforms: Omnibus Law on Central – Regional

Tax Reforms Finance Relation Reforms Omnibus Law on Financial
Job Creation
(Law No.7/2021) (Law No.1/2022) Sector (Law No.4/2023)
(Law No.11/2020)
Source: Ministry of Finance 25
 BUDGET OUTTURN UP TO FEBRUARY 2023 SHOWED PROMISING SIGN
2022 2023

Account Real.
Real. % to Revised % to Growth
(IDRtn) as of Budget as of
Budget Growth (%) Budget (%)
28 Feb 28 Feb

A. Revenue 302.6 13.4 37.8 2,463.0 419.6 17.0 38.7

I. Tax Revenue (DG Tax & Custom-Excise) 256.2 14.4 41.0 2,021.2 333.2 16.5 30.1

1. Tax 199.5 13.4 36.5 1,718.0 280.0 16.3 40.4

2. Custom & Excise 56.7 19.0 59.3 303.2 53.3 17.6 (6.1)
II. Non-Tax Revenue 46.3 9.6 22.8 414.4 86.4 19.6 86.6
B. Expenditure 282.7 9.1 (0.1) 3,061.2 287.8 9.4 1.8
I. Central Government 172.2 7.5 (4.2) 2,246.5 182.6 8.1 6.0

1. Line Ministries Spending 78.6 8.3 (19.0) 1,000.8 76.4 7.6 (2.8)

2. Non-Line Ministries 93.6 6.9 13.2 1,245.6 106.2 8.5 13.4

II. Regional Transfer & Village Funds 110.5 13.7 7.1 814.7 105.2 12.9 (4.8)

C. Primary Balance 61.9 (14.2) 370.1 (156.8) 182.2 (116.2) 194.3

D. Surplus (Deficit) 19.9 (2.4) (598.2) 131.8 (22.0) 562.2
% to GDP 0.10 (2.84) 0.63
E. Financing 84.0 10.0 598.2 182.2 30.5

26
Source: Ministry of Finance.
 GOVERNMENT MAINTAINS FOCUS ON PRIORITY SPENDING

Central Government Spending Health Spending Food Security Spending

IDR Trillion, Growth % IDR Trillion, Growth %
71.2%
1.7% 19.2%
-24.8% -34.0%
14.2 69.6 % 39.5 %
11.0 11.1 0.0 % 1.8 % 19.9 %
20.1
(4.2) 6.0
15.1 3.3
11.7 11.9 2.7
10.0 2.0
1.1 1.2

179.7 182.6
172.2 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
161.7
145.7
Social Protection Spending Subsidy Spending
82.7
93.6 106.2 IDR Trillion, Growth % IDR Trillion, Growth %
77.8
74.5 23.9% 24.9% 24.1%
-8.0% -29.9% 75.3
19.7 2.3 12.7 12.1
48.9
42.9 39.4
97.0 34.3 34.3
83.9 78.6 76.4
71.2
21.7 24.3
10.7 11.0 12.4

2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
Column1
Non-Line Ministries Spending (IDR T)
Growth (%)

27
Source: Ministry of Finance
 BUDGET OUTTURN UP TO FEBRUARY 2023 SHOWED PROMISING SIGN

Positive Growth in Main Sector Tax Revenue

Tax Performance (cumulative growth y-o-y)

Jan-Feb 23 Jan-Feb 22 Feb-23 Jan-23 Sem2-22 Sem1-22
Share
Manufacturing 18.9%
30.4% 42.7% 65.1%
Manufacturing 3.4%
38.4% 51.6%
14.8%
24.5% Trade 33.3%
23.6% 15.4%
Trade
51.3% 67.2%
30.5%
41.5% Financial 53.1%
11.1% Financial Services -2.6%
Services 16.1%
13.4%
30.5%
51.8% Mining 69.3%
7.5% Mining 25.1%
191.5% 293.2%
22.7%
Construction & 50.2%
5.2% Construction & Real 37.5% Real Estate -31.4%
Estate 9.3% 15.5%
58.2%
Transportation 62.5%
60.5% 32.1%
4.7% Transportation
2.8% 17.0%
32.7%
69.7%
54.0% Business Services 15.2%
3.8% Busines Services 18.1%
14.4%
2.9%
Information & 6.9%
Information & 5.2% 0.4%
3.3% Communication 12.3%
Communication 70.1%
28
Source: Ministry of Finance
 CUSTOMS AND EXCISE REVENUES ARE SLIGHTLY SLOW BUT ON-TRACK
Due to decreased export duty receipts, but import duty and excise revenues still showed positive performance.

Excise Revenue Import Duty Revenue Export Duty Revenue

93.23%
50.69% 54.08%
37.10%
-0.01% 6.57
15.64%
380.42%
42.28 42.27 -5.43% 7.88
-9.67%
6.82 176.80%

27.46 5.51
4.97 -21.68%
-69.01%

18.22
2.37
2.04

0.49
Jan - Feb Jan - Feb Jan - Feb Jan - Feb Jan - Feb Jan - Feb Jan - Feb Jan - Feb
2020 2021 2022 2023 2020 2021 2022 2023
Jan - Feb 2020 Jan - Feb 2021 Jan - Feb 2022 Jan - Feb 2023
Excise (IDR Trillion) Growth Import Duty (IDR Trillion) Growth
Export Duty (IDR Trillion) Growth

Influenced by tariff policies, the overflow Driven by extra effort in January, the dollar
effect of repayment of tobacco products Affected by the moderated price of CPO
exchange rate increased compared to last year
produced in December 2022, and the and the decline in the export volume of
and Vehicle Import Duty
effectiveness of supervision mineral commodities

Source: Ministry of Finance

29
 REALIZATION OF NON TAX REVENUE CONTINUES TO INCREASE
Mainly Driven by from Natural Resource Revenue, SOE’s profit, and Public Service Agency Revenue, and Other Non-Tax Revenue

(1.6) 5.3 126.8 19.5

Non-Tax Revenue (59.2)

Oil & Gas 15.9 T 16.8 T 15.5 T 18.6 T

86.6% 6.8 T
Revenue
2019 2020 2021 2022 2023
Gas
GasBumi Minyak
Oil Bumi Growth (%)
269.3
(0.7) (24.5) 28.2 50.7
29.6 T
86.4 Non-Oil &
5.5 T 4.1 T 5.3 T 8.0 T
Gas
22.8%
Revenue 2019 2020 2021 2022 2023
Non-Mineral&Coal
Nonminerba Mineral&
Minerba Growth (%)
2.1% Coal
-3.6% -2.8%

4,562.3 (94.3) 840.1 (96.0)

46.3 SOE’s
40.3 4.6 T
38.8 37.7 Revenue 0.0 T 0.0 T 0.0 T 0.0 T
2019 2020 2021 2022 2023
Dividen
SOE’s BUMN
Profit BI’s Surplus
Surplus BI Growth (%)

49.6 49.0
12.1 (0.4)
Other Non- 24.1 T
(23.0)
27.7 T
16.2 T 16.1 T 18.6 T
Tax Revenues
2019 2020 2021 2022 2023
Mining Line Ministries
PHT DMO PNBP K/L Growth (%)
Jan - Feb 2019 Jan - Feb 2020 Jan - Feb 2021 Jan - Feb 2022 Jan - Feb 2023 Product Revenues

Non Tax Revenue (IDR Trillion) Growth

Public 61.5 200.1
43.1
(24.5) (19.7)
Services 6.0 T
2.3 T 1.7 T 1.4 T 4.2 T
Agency (BLU)
2019 2020 2021 2022 2023
Revenue
Source: Ministry of Finance, YTD 28 February 2023 Public
BLU Service Agency Growth (%)

26
 THE PERFORMANCE OF TRANSFERS TO THE REGION REQUIRES IMPROVEMENT

Transfer to Region Fund

(January – February)
• The distribution of transfers to regions in
2023 IDR 105.2T the Indonesian government budget
(12.9% from budget) decreased by 4.8% in nominal terms as of
February 28, 2023.
2022 IDR110.5 T • The total disbursement was IDR 105.2 T
(13.7% from budget) (12.9%), slightly lower than the
Revenue Sharing (DBH) disbursement in FY 2022 of IDR 110.5 T
General Allocation (DAU) (13.7%).
Physical Special Allocation (DAK Fisik) • Some of the Transfer to Region funds have
Non- Phyisical Special Allocation (DAK Non Fisik) not been disbursed yet due to waiting for
Incentive for Local Gov't (DID)
the submission of disbursement
Special Autonomy & Privilege Allocation for Yogyakarta
requirements from the Regional
Village Fund
Government.
Local Government Performance

REVENUE 5.90 6.58

 Regional Tax 5.09 1.41 1.16
3.22 0.72
performance in 0.23 0.82 10.20 10.07
0.66 SPENDING
February 2023 grew
Up to Feb, local Gov’t
9.7% (y.o.y), driven by 25.85
23.57 spending grew by 4.0%
growth in the realization (yoy) contributed by
25.95 27.36
of consumptive taxes, Personnel and Other
indicating that the Spending.
economic activities of 2022 2023
the people in the Local Tax Retribution 2022 2023
regions are continuing
Return of Local Gov't Other Revenue Personnel Spending Material Spending
to improve.
Capital Spending Other Spendings 31
Source: Ministry of Finance, YTD 28 February 2023
 BUDGET FINANCING APPLY PRUDENT, FLEXIBLE, AND OPPORTUNISTIC PRINCIPLE

Financing Realization Up To 28 February Domestic Loan (Nett) Foreign Loan (Nett)

IDR (0.18 T) IDR 9.35 T
186.9

92.9
• Domestic Loan Withdrawal • Foreign Loan Withdrawal
177.7 (Gross) IDR 0.02T (Gross) IDR 16.91T
• Domestic loan principal • Foreign loan principal
67.7
installment financing installment financing
IDR (0.2T) IDR (7.56T)
-12.8 9.2
2022 2023
Loan (nett) Securities (nett)

• IDR 6T disbursement
PLAN & REALIZATION OF for The Low Income
INVESTMENT FINANCING Housing People’s Housing
Education • Financing LPDB International • Financing
Financing Financing
AS OF 28 FEB 2023 Fund by IDR 15T Development LDKPI
Liquidity • 16,647 Housing under
Management Cooperation by IDR 2T
Facility FLPP financing valued
at IDR 1,85T Agency Fund (LDKPI)
IDR 85.8T* (LPDP) IDR 8T*
IDR 134.1T*

Source: Ministry of Finance

32
MINISTRY OF FINANCE
REPUBLIC OF INDONESIA

THANK YOU
FISCAL POLICY AGENCY,MINISTRY OF FINANCE ,
REPUBLIC OF INDONESIA

Gd. Notohamiprodjo
Dr Wahidin no 1, Jakarta Pusat 10710
email: iru@kemenkeu.go.id

33
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