2017 State Budget Drafted After Considering Risks: Minister Sri Mulyani

Jakarta (Antara Bali) - The Indonesian government has drafted the 2017 state budget after taking into account various risks and emphasizing prudential principles to address domestic and global challenges, Finance Minister Sri Mulyani Indrawati said.

"From a macro standpoint, we have been able to induce a sense of optimism but must also exercise caution to deal with uncertain global conditions," she said at a CEO Forum here on Thursday.

By taking into account various risks in drafting the 2017 state budget, the government will be able to pursue the target of high economic growth, encourage investment in the development of human resources and infrastructure and maintain productivity, she stated.

"Admittedly, we have exercised caution while assuming growth targets in the 2017 state budget because we wanted to formulated a credible and effective state budget that supports the economy as per the medium-term national development plan," she stressed.

As part of the effort to maintain this sense of optimism, the draft 2017 state budget carries a more realistic target of state revenues based on the projection of domestic and global economic conditions next year, she noted.

"(The target of) state revenues from tax receipts has been set carefully as tax receipts in the three consecutive years were far below the target and this can have a negative impact in the fiscal year and send a bad signal," she explained.

In addition, the state expenditure has been directed towards infrastructure, education and health, she observed.

"The quality of state expenditure tops the list of our priorities to achieve economic growth as expected. For that, we will focus on creating more jobs, reducing poverty rate and narrowing disparities," she emphasized.

She argued that the 2017 state budget is not the only instrument to spur development as the country also needs private investment in certain sectors which the government cannot handle.

By adopting a more realistic posture when it comes to state revenues and expenditures, the government has factored in the 2017 state budget a deficit of 2.4 percent of the national gross domestic product.

Under the current circumstances, the figure is still relatively safe, she added.

"We have projected the budget deficit at 2.4 percent. The target is fairly cautious and in tandem with the wish to maintain market momentum and sentiment to deal with any psychological uncertainty. What is more, many big countries are undergoing a major political change," she noted. (WDY)