Early Analysis of Indonesia’s National Budget

Fiscal Year 2024

Context:
● On 21st September 2023, The National Parliament convened to ratify the national budget for Fiscal
year 2024 (Anggaran Pendapatan dan Belanja Negara/APBN 2024).

Disclaimer:
● This commentary is based on analysis of the draft of the 2024 national budget as published by
Ministry of Finance (link)

What are the Changes?

APBN 2023 APBN 2024 Mandala’s Take

Overall Posture (Thousand Trillion) Overall Posture (Thousand Trillion)

Revenue: IDR 2.4 Revenue: IDR 2.8 (12.9%) Higher expenditure with smaller
Expenditure: IDR 3.1 Expenditure: IDR 3.3 (7.9%) debt requires significant increase in
Debt: IDR 0.70 Debt: IDR 0.65 (-2.3%) revenue for 2024

Macro Assumptions Macro Assumptions

GDP Growth: 5.3% GDP Growth: 5.2% Lower assumption of oil price may
Oil: US$ 90 per barrel Oil: US$ 80-82 per barrel pose a challenge as doubt and
Inflation: 3.3% Inflation: 2.8% global uncertainty remains
Exchange Rate: IDR 14,750 Exchange Rate: IDR 15,000

Social Budget Social Budget Higher allocation for all aspects of

Education: IDR 608.3T Education: IDR 660.8T social budget. Fear of lower health
Health: IDR 169.8T (5.6% of Health: IDR 186.4T (5.6% of spending after new law is not
APBN) APBN) proven.
Social Protection: IDR 479.1T Social Protection: IDR 493.5T

Top 5 Ministry w/ Biggest Top 5 Ministry w/ Biggest

Budget Budget Public works leap Defense as the
ministry with highest budget, likely
Defense: IDR 143T Public Works: IDR 146T
due to higher budget for the new
Public Works: IDR 125T Defense: IDR 135T national capital. Budget for Ministry
Police: IDR 111T Police: IDR 114T of Health adjusted as COVID-19
Health: IDR 85T Education: IDR 97T status is now changed as endemic,.
Education IDR 80T Health: IDR 90T

Election Budget Election Budget Budget for Election Commission and

Election Commission: IDR 15T Election Commission: IDR 28T Election Supervisory Agency
Election Supervisory Agency: Election Supervisory Agency: balloons as election season peaks
IDR 7T IDR 11T next year.

4 Key Takeaways
● APBN 2024 will rely on efforts to increase government revenue as Ministry of Finance intends to
control the amount of debt. A deeper look at the composition of government revenue portrays that
income tax will bear the burden of increase in revenue (IDR 2,118T in 2023 to IDR 2,307T in 2024), as
non-income revenue falls (IDR 515T in 2023 to IDR 473T in 2024)
● The decision to set the assumption of oil price in 2024 at US$ 80 per barrel deserves further analysis
as global oil price continues to surge for the past 3 months amidst global uncertainty. This is also
reflected in the lower allocation to subsidy, decreasing from IDR 298T in 2023 to IDR 282T in 2024,
as the government mulls on changing scheme for oil subsidy
● Recent ratification of Law 17/2023 on Health was surrounded by controversy because the new law
erase mandatory spending for health for both central and regional government. However for 2024
central government’s budget for health is still at 5.6%, similar to the percentage from last year
● Ministry of Public Works is the ministry with the highest budget in APBN 2024, followed by
Ministry of Defense, The National Police, Ministry of Education, and Ministry of Health. Projects to
support the New Capital are present in all three main programs (Connectivity, Water Resource
Resilience, and Housing) of Ministry of Public Works, as the Government aims to finish the 1st phase
of the New Capital next year