Indonesia: Falling oil prices put pressure on state budget
Changes in the Indonesia Crude Price (ICP) will have an impact on the State budget deficit of the country in 2020, according to the Indonesian Ministry of Finance.
Head of the fiscal policy agency at the Indonesian Ministry of Finance Febrio Nathan Kacaribu (R) (Photo: )
Jakarta (VNA) – Changesin the Indonesia Crude Price (ICP) will have an impact on the State budget deficit ofthe country in 2020, according to the Indonesian Ministry of Finance.
Head of the fiscal policy agency at the ministry Febrio Nathan Kacaribusaid in a statement that if the oil prices continue to decline and the ICP drops to 30.9 USD per barrel, the deficit of Indonesia is estimated toincrease by 12.2 trillion Rp (787.1 million USD).
According to the official, the Indonesian governmentcontinues to monitor anticipatory policies through evaluatingnon-productive spending, and taking mitigation measures to maintain fiscalsustainability and economic growth.
The world crude oil prices have declined since the beginningof the year due to the global economic activity affected by the COVID-19outbreak.
Responding to the oil price development,the Ministry of Energy and Mineral Resources (MEMR) of Indonesia claimed it wasmonitoring the situation and the impact on the country’ energy sectors.
The ICP is still one of the cheapest in Southeast Asia andseveral other countries in the world, MEMR said.
Indonesia's budget revenue is expected to reach 1.76 quadrillion Rp in 2020, lowerthan the previous target of 2.23 quadrillion Rp. Meanwhile, budget spendingsoared to 2.61 quadrillion Rp from 2.54 quadrillion Rp previously. Recently,the Indonesian government also raised the budget deficit in 2020 from less than3 percent of GDP to 5.07 percent./.
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Head of the fiscal policy agency at the Indonesian Ministry of Finance Febrio Nathan Kacaribu (R) (Photo: ) 
