Indonesia Parliament committee okays budget
JAKARTA: The Indonesian Parliament’s budgetary committee yesterday approved President Joko Widodo’s budget for next year that has a fiscal deficit of 1.84 per cent of gross domestic product, smaller than this year’s projected budget gap of two per cent.
The committee approved a slightly bigger spending plan for next year than Joko’s proposal at 2,461.1 trillion rupiah (RM675.6 billion), said chairman of the committee. Joko proposed in August a spending allocation of 2,439.7 trillion rupiah.
The budget assumes economic growth of 5.3 per cent next year, with inflation at 3.5 per cent and the rupiah averaging 15,000 a US dollar.
The Parliament, which usually approves the committee’s endorsement, will vote on the budget today.
Meanwhile, foreign direct investment (FDI) in Indonesia fell for the second straight quarter in July-September from a year earlier, said the investment board.
FDI in rupiah terms fell 20.2 per cent in the third quarter, following a 12.9 per cent decline in the second quarter, which was the first contraction since at least 2011.
Indonesia attracted 89.1 trillion rupiah worth of FDI in the third quarter, or US$6.6 billion (RM27.5 billion), using the investment board’s rupiah exchange rate of 13,400 to the US dollar. That rate is the government’s formal assumption for the average rupiah exchange rate in this year’s state budget.
Global investors are generally cautious about the FDI data as the rupiah has tended to be volatile and the board’s figures exclude the banking and oil and gas sectors. The rupiah has lost 11 per cent of value against the US dollar so far this year.