macroeconomics and fiscal update

MACROECONOMICS AND FISCAL UPDATE

Jakarta, August 2022

The Team

Investor Relation Unit

Abdurohman

Director for Center of Macroeconomic Policy

Rahadian Zulfadin

Senior Analyst

Putri Rizki Yulianti

Analyst

Andi Yoga Trihartanto

Staff

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

[email protected]

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

Eko N Saputro

Senior Analyst

Hilda Choirunnisah

Staff

Adi Triyono

Staff

Disclaimer

This presentation was prepared by the Fiscal Policy Agency, Ministry of

Finance, Republic of Indonesia. This presentation is for your information and

is subject to change without notice. By accessing this presentation, you are

agreeing to be bound by the restrictions set out below. Any failure to comply

with these restrictions may constitute a violation of applicable securities laws.

This presentation contains forward looking statements that involve risk and

uncertainties. All statements other than statements of historical facts are

forward-looking statements. These statements involve known and unknown

risk, uncertainties and other factors that may cause the actual result

performance or achievements of the Republic Indonesia to be materially

different from those.

This presentation may not be reproduced, disseminated or quoted without

the prior written consent of the Ministry of Finance of Indonesia. Relaying

copies of this presentation to other persons elsewhere is prohibited.

NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY ORINDIRECTLY, IN ANY JURISDICTION IN WHICH SUCH PUBLICATION ORDISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW

MACROECONOMIC UPDATES

5 5

Source: Ministry of Health, processedSource: worldmeters.info, processed

0

5

10

15

20

25

30

0

1

2

3

4

A-2

0

J-2

0

A-2

0

O-2

0

D-2

0

F-2

1

A-2

1

J-2

1

A-2

1

O-2

1

D-2

1

F-2

2

A-2

2

J-2

2

A-2

2

mili

on Kasus Harian - 7DMA

Kematian Harian - 7DMA (rhs)

0,61mil

1,86tho

Vax 1

Vax 2

Boosters

203.4 mn (75.3% pop.)

171.06 mn (63.3% pop.)

60.90 mn (22.5% pop.)

Active Cases

43,582(0.7%)

Cumulative Cases

6.37 mnCumulative Deaths

157,608(2.5%)

Recovered

6.17 mn(96.8%)

COVID-19 & VACCINATION IN INDONESIA (2 September)

4.361

17

Cumulative Cases

608.61 mn(226 countries)

Cumulative Deaths

6.50 mn(1.1%)

Recovered

584.86 mn(96.1%)

Active Cases

17.25 mn(2.8%)

COVID-19 GLOBAL (1 September)

Subvariant Omicron BA.4 & BA.5 as VOC

Daily Cases – 7DMA

Daily Deaths – 7DMA (rhs)

0

100 0

200 0

300 0

400 0

500 0

600 0

-

10,000

20,000

30,000

40,000

50,000

60,000

M-2

0

M-2

0

J-2

0

S-2

0

N-2

0

J-2

1

M-2

1

M-2

1

J-2

1

S-2

1

N-2

1

J-2

2

M-2

2

M-2

2

J-2

2

Kasus Harian 7DMA

Kematian Harian 7DMA (rhs)

Daily Cases – 7DMA

Daily Deaths – 7DMA (rhs)

171,869

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

J-21 M-21 A-21 N-21 F-22 M-22 A-22

7DMADaily Vaccination – 7DMA

COVID-19 CASES HAVE SLOWED RECENTLY Vaccinations Still Need to be Strengthened

6

BUT RISK HAS ALSO SHIFTED FROM PANDEMIC TO THE GLOBAL ECONOMIC PRESSURE

Global Inflation Soared

Liquidity Tightening and

Rising Interest Rate

• Lead to the global financial market volatility, capital outflow, exchange

rate depreciation, and increased cost of fund.

• The global economic downturn accompanied by high inflation is a

highly dangerous and demands complicated combination of

economic policy.Stagflation Potential

Global Debt Crisis

Potential

• Many countries have very high debt ratios above 60%-100% of GDP.

• The cost of debt and refinancing risks rose sharply.

• Default potential >60 countries soared.

• Due to supply disruptions caused by the pandemic and war, combined

with excessive fiscal and monetary stimulus before and during the

pandemic in developed countries.

4

Countries 2019 2020 2021WEO IMF (July)

2022f 2023f

World 2.9 -3.1 6.1 3.2 2.9

Advanced Economies 1.7 -4.5 5.2 2.5 1.4

United States 2.3 -3.4 5.7 2.3 1.0

Europe Zone 1.6 -6.4 5.3 2.6 1.2

Emerging Market 3.7 -2.0 6.8 3.6 3.9

China 6.0 2.2 8.1 3.3 4.6

Indonesia 5.0 -2.1 3.7 5.3 5.2

India 3.7 -6.6 8.9 7.4 6.1

Russia 2.2 -2.7 4.7 -6.0 -3.5

3.6 3.62.9

-3.1

6.13.2 2.9

2019 2020 2021 2022f 2023f

IMF WEO April IMF WEO July

Decline compare to previous projection

AS THE RESULT, GLOBAL ECONOMIC GROWTH PROJECTION IS DOWN

DUE TO VARIOUS EMERGING CHALLENGES

• The economic slowdown due to the pandemic was exacerbated by various escalating shocks, : persistently high inflation rates (especially in the US & Europe) that triggering sharp monetary tightening, China’s economic slowdown, and the negative impact of the Ukraine war. The downside risks are increasingly significant.

• The decline in economic growth forecasts that occurred broadly included major countries such as the US, China, and Europe. In addition to external factors, domestic challenges in the country have also attracted the country's attention to downward economic growth

• Inflation projections are revised upwards due to rising energy and food prices and persistent supply-demand mismatches.

Global Economic Growth Projection IMF, % yoy

Source: WEO IMF April and July 2022, processed

0,4 0,7

Various Countries Growth Projection, % yoy

6.6% (↑ 0.9 pp)

Advanced Economies

9.5% (↑ 0.8 pp)

Emerging MarketInflation

Projection 2022

7

51.150.3

25

35

45

55

65

Aug-20 Feb-21 Aug-21 Feb-22 Aug-22

Global

PMI MANUFACTURE PER AUGUST 2022

Source: Bloomberg, IHS Markit

GLOBAL MANUFACTURING ACTIVITIES EXPERIENCING FURTHER CONTRACTION IN AUGUSTIndonesia's PMI increased amid contraction and weakening manufacturing in major countries, such as Europe, China and the US

Thailand 53,7

Malaysia 50,3

Vietnam 51,2 (Juli)

Philippines 51,2

Japan 51,5

South Korea 47,6

Indonesia 51,7

China 49,5

US 51,5

Europe 49,6

Russia 51,7

India 56,2

25

35

45

55

65


Major Countries

25

35

45

55

65


ASEAN-5

PMI Manufacture

Performance

Statistic in G20

dan ASEAN-6(minus SGP, VNM, ZAF,

SAU & ARG)

Acceleration(in expansive zone & increasing

from previous month)

Recover(upgrade from contraction zone in previous to

month to expansive zone)

Slowed Down(in expansive zone, but slowed down from

previous month)

Contracted(in contraction zone)

23.8% 23.8%4.8% 52.4%

Indonesia, Thailand,

Philippines, Russia,

Australia

France US, Japan, India, Malaysia,

Brazil

Europe, Germany, Italy, UK,

China, South Korea, Canada,

Mexico, Spain, Turkey.

Expansion of Global PMI Manufacture slowed down to 50.3 in August, the lowest in past 26 months

1,779.7 1,676.8

866.6

905.5

300

600

900

1200

1500

1800

2100

J-2

0

M-2

0

J-2

0

S-2

0

D-2

0

M-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

CPO 5dma (US$/Ton)

1,560.4

1,330.8

1,419.2

750

900

1050

1200

1350

1500

1650

J-2

0

M-2

0

J-2

0

S-2

0

D-2

0

M-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

Soybean 5dma (US$/bu.)

753.7

582.5

670.3

300

400

500

600

700

800

J-2

0

M-2

0

J-2

0

S-2

0

D-2

0

M-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

Corn 5dma (US$/Bushels)

1,307.01,224.7

795.7

400

600

800

1000

1200

1400

J-2

0

M-2

0

J-2

0

S-2

0

D-2

0

M-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

Wheat 5dma (US$/Bushels)

9.0

5.6

9.2

2

3

4

5

6

7

8

9

10

J-2

0

A-2

0

J-2

0

O-2

0

J-2

1

A-2

1

J-2

1

N-2

1

F-2

2

M-2

2

A-2

2

Natural Gas 5dma (US$/MMBtu)

414.9

258.2

421.0

419.4

0

100

200

300

400

500

J-2

0

M-2

0

J-2

0

S-2

0

D-2

0

M-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

Coal 5dma (US$/Metric Ton)

125.5 126.0

97.5

10

30

50

70

90

110

130

150

J-2

0

M-2

0

J-2

0

S-2

0

D-2

0

M-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

Brent 5dma (US$/barrel)

Source: Bloomberg, As of 2 Sept 2022, processed

MEANWHILE, COMMODITY PRICES ARE STILL VOLATILE Despite some commodity prices show a tendency to decline, in line with the weakening global outlook

The global food prices start to increase (except for wheat), among others due to weather factors and geopolitical tension

Gas prices rise again in line with persistent geopolitical tensions in Europe, brent prices gradually declining, and coal start to increase again

Ytd

146.8%Ytd

152.0%Ytd

22.8%

Ytd

-28.0%Ytd

0.6%

Ytd

11.0%

Ytd

21.3%

7

10Source: Bloomberg, processed

HIGH INFLATIONARY PRESSURE IN THE US HAS LED TO A FASTER THAN EXPECTED

TIGHTER MONETARY POLICY

10

197412.3

198014.8

19906.3

20085.6

July 20228.5

-4

-2

0

2

4

6

8

10

12

14

16

19

70

19

71

19

72

19

74

19

75

19

76

19

78

19

79

19

80

19

82

19

83

19

84

19

86

19

87

19

88

19

90

19

91

19

92

19

94

19

95

19

96

19

98

19

99

20

00

20

02

20

03

20

04

20

06

20

07

20

08

20

10

20

11

20

12

20

14

20

15

20

16

20

18

20

19

20

20

20

22

Inflasi AS (%, yoy)

Oil embargo & Yom Kippur War

Oil Glut & Iran – Iraq War

Post-pandemic & war in Ukraine

Economic

Growth

(Annually)

Policy Rate

Policy Rate and US Economic Growth (%)2.5

0.25

0.5

1.00

1.75

2.50

3.50

4.00

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

0

5

10

15

20

25

30

35

40

May

-09

Feb

-10

No

v-1

0

Au

g-1

1

May

-12

Feb

-13

No

v-1

3

Au

g-1

4

May

-15

Feb

-16

No

v-1

6

Au

g-1

7

May

-18

Feb

-19

No

v-1

9

Au

g-2

0

May

-21

Feb

-22

No

v-2

2

Au

g-2

3

Suku Bunga FFR & FED Balance Sheet

Fed Balance Sheet (% of GDP)

Suku Bunga FFR (%, rhs)

Proyeksi FFR (%, rhs)

FFR Policy Rate (%,rhs)

FFR Projection (%,rhs)

Policy Rate and US FED Balance Sheet

11

10.1

13.75

0

3

6

9

12

15

F-2

0

M-2

0

A-2

0

N-2

0

F-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

Brazil

8.2 8.50

0

3

6

9

12

15

F-2

0

M-2

0

A-2

0

N-2

0

F-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

Mexico

6.7

5.40

0

3

6

9

12

15

J-2

0

M-2

0

S-2

0

J-2

1

M-2

1

S-2

1

J-2

2

M-2

2

India

4.9 3.75

0

3

6

9

12

15

F-2

0

M-2

0

A-2

0

N-2

0

F-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

Indonesia

8.5

2.50

(1)

1

3

5

7

9

11

13

15

J-2

0

A-2

0

J-2

0

O-2

0

J-2

1

A-2

1

J-2

1

O-2

1

J-2

2

A-2

2

J-2

2

USA

10.1

1.75

(1)

1

3

5

7

9

11

13

15

F-2

0

M-2

0

A-2

0

N-2

0

F-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

UK

MONETARY POLICY TIGHTENING ALSO CONTINUED IN MANY COUNTRIES Indonesia inflation remains stable despite challenging global situation

Source: Bloomberg, as of Sept 1, processed

Policy Rate (%)Inflation (%, yoy)

G20 Countries Which Have Increased Their Rates

11

Interest rate increases

for the first time since

2011

FFR was increased by 75

bps on July 2022

The interest rate is

expected to continue

to hike

↑ 450 bps since 2022↑ 300 bps since 2022 ↑ 140 bps since 2022

↑ 225 bps since 2022↑ 150 bps since 2022 ↑ 50 bps since 2022

G20 Countries Have Not Increased Their Rates

Interest rates have fallen

3 times (20 bps in total)

since 2021

↑ 25 bps in August 2022

2.6

-0.10(1)

1

3

5

7

9

11

13

15

J-2

0

J-2

0

N-2

0

A-2

1

S-2

1

F-2

2

J-2

2

Japan

2.7

3.65

(3)

0

3

6

9

12

15

F-2

0

M-2

0

A-2

0

N-2

0

F-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

China

9.1

0.50

(1)

1

3

5

7

9

11

13

15

F-2

0

M-2

0

A-2

0

N-2

0

F-2

1

M-2

1

A-2

1

N-2

1

F-2

2

M-2

2

A-2

2

Europe

3.0

(5.3)

(3.5)

(2.2)(0.7)

7.1

3.5

5.0 5.0

5.4

(2.1)

3.7

5.2

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2020 2021 2022

Share

(% GDP) Expenditure2020 2021 2022

Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2

54.4 HH Cons. 2.8 -5.5 -4.0 -3.6 -2.6 -2.2 6.0 1.0 3.6 2.0 4.3 5.5

9.1 Gov. Cons. 3.8 -6.9 9.8 1.8 2.0 2.5 8.1 0.6 5.2 4.2 -7.6 -5.2

30.8 Investment 1.7 -8.6 -6.5 -6.2 -5.0 -0.2 7.5 3.8 4.5 3.8 4.1 3.1

21.6 Export 0.2 -12.4 -13.0 -6.9 -8.1 6.9 31.5 29.2 29.8 24.0 16.7 19.7

(18.9) Import -5.4 -20.7 -24.5 -15.8 -16.7 4.4 31.8 29.9 29.6 23.3 15.9 12.3

GDP 3.0 -5.3 -3.5 -2.2 -2.1 -0.7 7.1 3.5 5.0 3.7 5.0 5.4

INDONESIA’S ECONOMY CONTINUE TO RECOVER BEYOND MARKET EXPECTATIONSAmid the dynamics of the global economy, the recovery

performance continued and strengthened further in the

second quarter of 2022

Household consumption increased rapidly during the month of

Ramadan and Eid al-Fitr, reflected in the high growth in consumption of

transportation and communications as well as restaurants and hotels.

Government consumption contracted in line with the decline in

spending for handling the pandemic (medical devices, medicines, and

patient care).

Investment grew positively in line with the well-maintained

sustainability of the expansion of the business world.

Exports recorded high growth in line with the demand for superior

national commodities and manufactured products.

From the production side, high commodity prices have catalyzed

strong growth in the mining and agriculture sectors. The expansion of

the manufacturing and trade sectors continued to be stable, in line with

improvements in production capacity and domestic demand.

BROAD-BASED ECONOMIC RECOVERY, THE TRANSPORTATION AND ACCOMMODATION SECTOR CONTINUES TO STRENGTHENLeading sectors are already growing above pre-pandemic levels

RECOVERY TREND: THE PRODUCTION SIDE(%, YOY)

Source: Indonesia Statistics, processed

RECOVERY TREND: THE PRODUCTION SIDE(% GDP level vs 2019)

*Semi-annual growth compared to average 2019 levels

1.6

3.6

2.0

0.4

-0.5

0.7

-12.3

-6.8

18.1

5.2

7.1

4.4

4.3

4.9

3.4

5.8

3.5

2.4

28.0

8.1

PDB

Pertanian

Pertambangan

Manufaktur

Konstruksi

Perdagangan

Transportasi

Akomodasi & Mamin

Infokom

Real Estate

2020 2021 S1 2022

-2.1

1.8

-2.0

-2.9

-3.3

-3.8

-15.0

-10.3

10.6

2.3

3.7

1.8

4.0

3.4

2.8

4.7

3.2

3.9

6.8

2.8

5.2

1.3

3.9

4.5

3.0

5.1

18.6

8.2

7.6

3.0

PDB

Pertanian

Pertambangan

Manufaktur

Konstruksi

Perdagangan

Transportasi

Akomodasi & Mamin

Infokom

Real Estate

2020 2021 S1 2022

GDP

Agriculture

Mining

Manufacturing

Construction

Trade

Transportation

Hotel & Restaurant

ICT

GDP

Agriculture

Mining

Manufacturing

Construction

Trade

Transportation

Hotel & Restaurant

ICT

14

9.9

5.0

8.2

5.0

6.2

3.8 4

.8 5.4

8.7

3.0

2.3

1.8

3.5 3.6

0.7

4.8

11

.8

8.9

4

7.4

5.4

4.6

4.4

4.2

4.0

2.9

2.9

2.5

2.1

1.6

1.4

1.1

0.4

SAU MYS PHIL IDN ITA SGP FRA EUR GBR KOR THA MEX USA DEU JPN CHN

Q2 2022 Economic Growth in G20 and ASEAN-5 Countries (% yoy)

Q1-22 Q2-22

5.8 4.9

1.6

7.1

-0.2

6.6

0.8 1.4 1.2

6.7

-2.7-1.7

4.2

-0.9-2.9

13.4

SAU MYS PHL IDN ITA SGP FRA EUR GBR KOR THA MEX USA DEU JPN CHN

Real GDP Levels Semester-I 2022 to Semester-I 2019 (%)

Source: Bloomberg, tradingeconomics as of 15 Augustus 2022

• Q2 2022 economic growth experienced a slowing trend in most countries. On a qoqbasis, the US even recorded a contraction in the 2nd quarter of 2022.

• The slowdown was caused by various factors, such as the Ukraine war and the energy crisis in Europe, the decline in investment in the US, as well as the zero-COVID policy & property crisis in China.

• Indonesia's Q2 2022 economic growth strengthened amid the global crisis and uncertainty, supported by consumption and export performance.

• Compared to pre-pandemic levels, the countries' real GDP in Semester I 2022 shows diversity. The Real GDP of China, Indonesia, Singapore, Korea and Singapore is much stronger than before the pandemic.

• On the other hand, economic performance in many European countries is still struggling to control output levels before the pandemic

INDONESIA'S ECONOMY IS STILL STRONG AMID SLUGGISH ECONOMIC TRENDS IN

VARIOUS COUNTRIES IN Q2 2022

1515

Labor MarketSource: Statistic Indonesia

Poverty Source: Statistic Indonesia

Effective National Economic Recovery Program (PEN) has provided strong booster to the economy as well as protection to the poor people

4.2 million

people

4.55 million

people

0.35 million

people

7.57 million

people

6.9

8.78.4

4.94

6.26

5.83

0

2

4

6

8

10

12

0

2

4

6

8

10

12

Unemployment (Million People) Unemployment Rate (RHS,%)

24.8

27.626.5

9.22

10.19

9.71

0

2

4

6

8

10

12

14

0

5

10

15

20

25

30

35

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Poverty (Million People) Poverty Rate (%)

Unemployment

The working age population affected by Covid-19

Working people

The labor force

Source: Statistics Indonesia 15

ROBUST RECOVERY HAS BROUGHT DOWN UNEMPLOYMENT AND POVERTY RATE

1616

● In July 2022, Exports reached USD25.57 billion, and Imports reached

USD21.35 billion.

● Exports contracted 2.2% (mtm) while imports grew 1.6% (mtm).

Annually and cumulatively, exports and imports show a positive

direction. Exports grew by 32.03% (YoY) and 36.36% (ytd), while

imports grew by 39.86% (YoY) and 29.38% (ytd).

● The trade balance in July 2022 recorded a surplus of USD4.23 billion,

continued the surplus trend for 27 consecutive months.

TRADE BALANCE CONTINUED TO RECORD A SURPLUSExport and import performance continues to grow positively in the midst of global economic pressure

16

4.20

-4

-2

0

2

4

6

8

10

12

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

2020 2021 2022

Bill

ion

USD

Trade Balance

Oil & Gas Non-Oil & Gas TotalSource: Statistics Indonesia

32.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

20

20

-J F M A M

J J A S O N D

20

21

-J F M A M

J J A S O N D

20

22

-J F M A M

J J

Export

Ekspor nonmigas (USD bn)

Ekspor Migas (USD bn)

Ekspor growth (yoy, rhs)

Non-Oil & Gas (USD bn)

Oil & Gas (USD bn)

Growth (YoY)

39.9%

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

0.0

5.0

10.0

15.0

20.0

25.0

20

20

-J F M A M

J J A S O N D

20

21

-J F M A M

J J A S O N D

20

22

-J F M A M

J J

Import

Impor Nonmigas (USD bn)

Impor Migas (USD bn)

Impor growth (yoy, rhs)

Non-Oil & Gas (USD bn)

Oil & Gas (USD bn)

Growth (YoY)

17

Foreign Reserves(billion USD)

Balance of Payment(billion USD)

Current Account Balance(billion USD)

17

Financial Account Balance(billion USD)

A current account surplus was maintained, primarily supported by a large goods trade

surplus

Balance of Payments (BOP) in the quarter-II of 2022 remained sound, thereby bolstering

external resilience

Source: Bank Indonesia

Despite persistently elevated global financial market uncertainty, capital and

financial account performance in the first quarter of 2022 remained sound, supported

by a direct investment surplus

The position of reserve assets is well above the international adequacy standard.

17

12

1

13

1.7

13

5.2

13

5.9

13

7.1

13

7.1

14

6.9

14

4.9

13

9.1

13

6.4

13

2.2

7.0 8.1 9.1 9.8 9.7 8.8 8.6 7.8 7.0 6.4 6.1

0.02.04.06.08.010.012.0

0

50

100

150

200

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 July

2020 2021 2022

Foreign Reserves

Months of Imports & Servicing Government External Debt

EXTERNAL POSITION REMAINED RELATIVELY STRONG AS CURRENT ACCOUNT SURPLUS CONTINUED

-1.1

3.9

2.4

-10.0

-5.0

0.0

5.0

10.0

15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2019 2020 2021 2022

Capital & Financial Account Current Account Overall Balance

3.9

1.1

-4.0

-2.0

0.0

2.0

-20

0

20

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2019 2020 2021 2022

Secondary Income Primary IncomeServices GoodsCurrent Account Current Account (% of GDP) - RHS

-1.1

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2019 2020 2021 2022

Direct Investment Portfolio Investment

Financial Derivatives Other Investment

Capital & Financial Account

181818

AUGUST 2022 INFLATION WAS AFFECTED BY DECREASING FOOD PRICES

Source: Statistics Indonesia

INDONESIA INFLATION

3.6

4.44.9

4.7

3.0

6.8

8.9

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Ja

n

Feb

Ma

r

Ap

r

Me

i

Ju

n

Ju

l

Ag

s

Se

p

Okt

No

v

De

s

Ja

n

Feb

Ma

r

Ap

r

Me

i

Ju

n

Ju

l

Ag

s

2021 2022

IHK

Core

Administered Price

Volatile Foods

percentage,

Inflation

Home Leasing/Rent

Tuition Fee

Core Inflation

Fuels and Electricity

Air Freight Fares

Administered Price

Eggs, Rice

Shallot, Chili, Cayenne

Pepper, Cooking oils

Chicken, other vegetables

Volatile Food

3.04% 6.84% 8.93%

4.69%

(yoy)

3.63%

(ytd)

-0.21%

(mtm)

Weight

65.4%Weight

18.1%

Weight

16.5%

1919

Q2 2022 DIRECT INVESTMENT GROWING STRONG BY 35.5% (YOY)The highest growth since 2016

19

54.0%46.0%

Direct Investment Proportion

Foreign

Domestic

302.2

35.5

-

50.0

100.0

150.0

200.0

250.0

300.0

350.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2019 2020 2021 2022

Total Investasi (YoY)

139.0 -

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2019 2020 2021 2022

Rp

Tri

liun

Domestic Direct Investment

163.2 -

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2019 2020 2021 2022

Rp

Tri

liun

Foreign Direct Investment

10.8%

39.7%30.8%

2.8%

Direct Investment Realization

• Realization of direct investment in Q2 2022 was IDR 302.2 T (cumulatively

until June reached IDR 584.6 T), reached 48.7% of the President's target for

2022 of IDR 1,200 trillion

• In the midst of global pressure challenges, Foreign Direct Investment

continues to grow strongly.

• Foreign and domestic investment were able to grow double digits from last

year's realization supported by investor confidence in political stability,

improved legal processes and transparency, and accelerated investment

services.

20

As of July 8

Indonesia’s manufacturing PMI is at an expansionary

level for ten consecutives months

High growth (% yoy) of electricity consumption from

industrial and business activities

Retail Sales Index continues to strengthen, in line with

public optimism and mobilityGoogle mobility index is far above the pandemic level,

even slowed down from its highest during in Ied Festive

Mandiri Spending Index continues to strengthen, in

line with public optimism and mobility

Consumption Indicators

Production and Investment Indicators

Source: Statistics Indonesia, Bank Indonesia, HIS Markit, PLN, Google, CEIC

Both consumption and production sides continued to show a strong performance

20

SEVERAL LEADING INDICATORS ALSO CONTINUE TO SHOW A STRONG TREND

Production capacity for manufacturing and mining

keeps improving, approaching the pre-pandemic level

70.84

72.91

545658606264666870727476

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2020 2021 2022

31-July-22132.7

40

60

80

100

120

140

160

180

Jan

-20

Mar

-20

May

-20

Jul-

20

Sep

-20

No

v-2

0

Dec

-20

Feb

-21

Ap

r-2

1

Jun

-21

Au

g-2

1

Oct

-21

No

v-2

1

Jan

-22

Mar

-22

May

-22

Jul-

22

23

4.1

2

06

.6

20

4.9

8.7%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

0

50

100

150

200

250

300

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

2020 2021 2022

RSI

Growth RSI (%yoy)

7.816.2

-2.5

25.9

-40

-30

-20

-10

0

10

20

30

40

Jan

Fe

bM

ar

Ap

rM

ay

Jun

Jul

Au

gS

ep

Oct

Nov

Dec

Jan

Fe

bM

ar

Ap

rM

ay

Jun

Jul

Au

gS

ep

Oct

Nov

Dec

Jan

Fe

bM

ar

Ap

rM

ay

Jun

eJuly

2020 2021 2022

Industry

Business

20.9

-40

-30

-20

-10

0

10

20

30

40

F-2

0M

-20

A-2

0M

-20

J-2

0J-2

0A

-20

S-2

0O

-20

N-2

0D

-20

J-2

1F

-21

M-2

1A

-21

M-2

1J-2

1J-2

1A

-21

S-2

1O

-21

N-2

1D

-21

J-2

2F

-22

M-2

2A

-22

M-2

2J-2

2J-2

2

As of 11 Aug

51.7

30

35

40

45

50

55

60

Jan

21

Mar

21

May

21

Jul 2

1

Sep

21

No

v 2

1

Jan

22

Mar

22

May

22

Jul 2

2

21

DECLINING DEBT RATIO BECOMES A STRONG FOUNDATION TOWARDS

SOFT LANDING IN 2023Indonesia's economic conditions and prospects have received appreciation from International Institutions

• The Covid-19 pandemic handling increased the Indonesia's debt ratio position in 2020-2021

• The Debt-to-GDP ratio at the end of July 2022 decreased to 37.91%, driven by controlling debt financing in line with the better performance of the government budget and the recovery of the economy so that the outlook for the budget deficit declined

Debt-to-GDP ratio on a Downward Trend

23.10 22.95 24.88 24.68

27.46 28.34 29.40 30.10 30.18

39.36 40.73

37.91

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Juli2022

S&P upgraded Indonesia's outlook from negative to STABLE in line with rating affirmations by Moody's, Fitch, R&I and JCRA:

confirm the condition of strong economic fundamentals and positive prospects

• The Ability to absorb shocks from the pandemic without any negative impact on the medium-term economic trajectory

• The impact of the pandemic on Indonesia's fiscal is better than that of its peers, with a promising fiscal consolidation scenario

• Significant progress in returning to a moderate fiscal deficit and improving Indonesia's external economic position

161 Rating Downgrades

57 by Fitch53 by Moody’s

51 by S&P

109 Negative Outlook Revision40 by Fitch

25 by Moody’s44 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 14 Rating Action Upgrades, 48 Rating Action Downgrades and 12 Negative Outlook Revisions

Rating Action during the 2020-2021 Pandemic

30 Rating Upgrades

11 by Fitch10 by Moody’s

9 by S&P

Rating AgencySovereign Credit

RatingOutlook Tanggal Asesmen

R&I BBB+ Stable 27 May 2022

S&P BBB Stable 27 April 2022

JCR Agency BBB+ Stable 27 July 2022

Moody’s Baa2 Stable 10 January 2022

Fitch BBB Stable 13 June 2022

Indonesia Rating Position

Source: Ministry of Finance

2222

ACCELERATING ECONOMIC TRANSFORMATION IS EXPECTED TO ENHANCE PRODUCTIVITYExpediting structural reforms agenda is therefore critically important

Economic Growth Projection (%, yoy)

Strengthening productivity through accelerated

economic transformation will boost economic growth in

2023:

As social activities get to normal, economic activities

strengthen.

Down streaming commodities, rising digital economy,

and the increasing awareness of green economy will

boost investment activities, trade and manufacturing

sectors

(per July-22)

PROJECTIONS OF INDONESIA’S ECONOMIC GROWTH IN 2022

consensus forecast

(WEO July-22) (GEP Jun-22) (per May-22)

5.15.3 5.24.9 – 5.3

Source: Ministry of Finance, IMF WEO, World Bank Global Economic Prospect, OECD Economic Outlook, Bloomberg 22

5.1

6.2 6.05.6

5.0 4.9 5.0 5.1 5.2 5.0

-2.1

3.7

5.4

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022(per Jul-22)

5.2

Indonesia EconomicResilience

24

Comparison of G-20 and ASEAN-6 Indicators

-2.9

-2.7

-1.9

-1.7

-0.9

-0.2

-0.2

0.8

0.8

1.1

1.2

1.3

1.4

1.5

1.6

4.2

4.9

5.5

5.8

6.6

6.7

7.1

13.2

13.4

JPN

THA

ZAF*

MEX

DEU

ARG*

ITA

FRA

BRA*

AUS*

GBR

RUS

EUR

CAN*

PHL

USA

MYS

TUR*

SAU

SGP

KOR

IDN

IND*

CHN

Level of Real GDP Semester-I 2022 to

Pre-Pandemic Semester-I 2019 (%)

13.010.5

5.53.43.2

2.52.12.01.6

1.10.6

-0.6-0.9-1.0

-1.5-1.7-1.7

-2.2-2.5-2.6-3.0-3.1

-3.7-4.4-4.8

TUR

CHN

VIE

KOR

SGP

AUS

USA

RUS

IDN

IND

BRA

ARG

CAN

SAU

EUR

FRA

ZAF

DEU

GBR

MYS

JPN

ITA

MEX

PHL

THA

Real GDP Level 2021 to Real GDP

Level 2019 (%)

INDONESIA'S ECONOMY IS AMONG A FAST RECOVERY WITH CONTROLLED INFLATION

Since 2021, the

Indonesian

economy has

recovered to

pre-pandemic

levels, indicated by

the real GDP in

2021, which is 1.6%

above the 2019 level

and 7.1% in the first

half of 2022.

The rapid economic

recovery was

accompanied by

controlled inflation

and is one of the

most moderate

among peers.

Source: IMF, CEIC, Ministry of Finance, 15 Aug 2022

Note: *) GDP is only available until Q1-2022 Note: *) Inflation available until Aug 2022

79.671.0

15.110.110.19.18.58.48.27.97.87.77.67.06.76.46.36.15.84.74.42.92.72.72.6

0 50 100

Turki

Argentina

Rusia

Brazil

Inggris

Eropa*

AS

Italia*

Meksiko

Jerman*

Afsel

Thailand

Kanada

Singapura

India

Filipina

Korsel

Australia

Perancis*

Indonesia*

Malaysia

Vietnam*

Arab Saudi

Tiongkok

Jepang

Inflation July/Aug* 2022 (%)

25

INDONESIA'S EXTERNAL AND FISCAL STABILITY IS WELL MAINTAINED

18.17.4

6.96.6

4.93.73.53.53.32.9

2.41.8

1.30.30.1

-0.4-0.5

-0.9-1.6-1.7-1.8-1.8-2.1

-2.6-3.5

SGP

DEU

RUS

SAU

KOR

ZAF

AUS

MYS

ITA

JPN

EUR

CHN

ARG

IDN

CAN

MEX

VIE

FRA

IND

BRA

PHL

TUR

THA

GBR

USA

2021 Current Account Balance

(% of GDP)

2.9

3.3

6.0

8.0

8.2

8.6

10.1

10.7

12.2

12.6

13.2

13.7

16.1

16.1

16.1

16.3

16.6

16.7

16.8

17.7

20.7

23.1

24.7

KOR

RUS

SGP

DEU

MEX

TUR

MYS

IDN

PHL

THA

ARG

SAU

CAN

FRA

ZAF

AUS

JPN

CHN

ITA

BRA

GBR

IND

USA

Accumulated Fiscal Deficit

2020-2021 (% of GDP)


Indonesia's

external stability

was maintained,

marked by the

current account

which recorded a

surplus

Prudent and

sustainability-

oriented fiscal

management can

also be seen from

the moderate deficit

level and low debt

Source: IMF, Trading Economics, CEIC, Ministry of Finance, 29 July 2022

17.030.040.240.741.649.857.557.658.059.869.069.170.273.380.686.893.095.396.0

112.1112.3

132.6132.8

150.9263.1

RUS

SAU

VIE

IDN

TUR

KOR

PHL

MEX

THA

AUS

MYS

ZAF

DEU

CHN

ARG

IND

BRA

GBR

EUR

CAN

FRA

USA

SGP

ITA

JPN

2021 Govt Debt (% of GDP)

26

PRESSURE IN INDONESIA'S FINANCIAL SECTOR IS RELATIVELY MORE MODERATE

THAN MANY COUNTRIES


Source: Bloomberg, 12 August 2022

7.54

1.90

1.81

1.76

1.74

1.32

1.31

1.17

1.15

1.14

1.02

1.00

0.97

0.95

0.84

0.79

0.64

0.60

0.55

0.48

0.37

0.12

-0.04

RUS

ITA

TUR

AUS

PHL

USA

CAN

DEU

SAU

GBR

KOR

SGP

BRA

MEX

IND

FRA

VIE

IDN

ZAF

THA

MYS

JPN

CHN

10Y Yield Change 2022

(ytd, percentage point)

-16.0

-15.7

-15.1

-13.2

-10.0

-8.4

-8.3

-7.1

-5.9

-5.5

-4.9

-4.0

-3.9

-2.1

-0.9

1.6

2.1

4.7

7.6

8.3

11.1

ITA

VIE

KOR

DEU

CHN

FRA

MEX

USA

PHL

AUS

CAN

ZAF

MYS

THA

JPN

GBR

IND

SGP

BRA

IDN

SAU

Stock Index 2022 (%, ytd)

-34.9

-31.0

-15.9

-10.3

-9.8

-9.5

-9.1

-7.2

-6.7

-6.1

-5.8

-2.9

-2.5

-1.7

-1.5

-1.1

0.0

2.0

3.3

9.0

10.4

17.7

TUR

ARG

JPN

GBR

EUR

KOR

PHL

IND

MYS

CHN

THA

IDN

VIE

SGP

ZAF

CAN

SAU

AUS

MEX

BRA

USA

RUS

Exchange Rate 2022 (%, ytd)Pressure in the financial

sector occurs in many

countries, but pressure for

Indonesia is relatively

more manageable

compared to many peers

Rupiah depreciation and

rising Indonesian yields

were among the most

moderate, while stock

indexes were among the

best performing

Fiscal Policy Updates

Amid increasing commodity prices and escalating uncertainty risk of global economy

“The Budget must be Vigilant, Anticipative, Responsive”

The Budget as Shock Absorber

Controlling inflation and maintaining

people’s purchasing power

Maintaining momentum of recovery (alleviating

unemployment & poverty)

Maintaining priority expenditures (strengthening

productivity and national economic foundation)

Preparing fiscal buffer to anticipate

uncertainty

Strengthening foundation for fiscal consolidation and

sustainability

Momentum of Strengthening Fiscal Resilience

Expenditure Optimization: Subsidies, Compensation, Social Protection, and priority spending

(infrastructure, health, education and support for structural reforms)

Maintaining Budget Health in the Middle & Long term

FISCAL CONSOLIDATION

AND REFORM

AMIDST ESCALATING UNCERTAINTY RISK OF GLOBAL ECONOMY, BUDGET WILL BE OPTIMIZED AS SHOCK ABSORBER

28

Account

(IDR T)

2021 2022

YTD 31

July

2021

Growth

(%)

AuditedPerpres

98/2022

YTD 31 July

2022

% of

Perpres

98/2022

Growth

(%)

A. Revenue 1,031.7 11.8 2,011.3 2,266.2 1,551.0 68.4 50.3

I. Tax Revenue 788.9 11.0 1,547.8 1,784.0 1,213.5 68.0 53.8

1. Tax 647.7 7.6 1,278.6 1,485.0 1,028.5 69.3 58.8

2. Custom & Excise 141.2 29.5 269.2 299.0 185.1 61.9 31.1

II. Non-Tax Revenue 242.3 15.9 458.5 481.6 337.1 70.0 39.1

B. Expenditure 1,368.4 9.3 2,786.4 3,106.4 1,444.8 46.5 5.6

I. Central Government 952.8 20.1 2,000.7 2,301.6 1,031.2 44.8 8.2

1. Line Ministries 549.2 30.9 1,190.8 945.8 490.7 51.9 (10.7)

2. Non-Line Ministries 403.6 8.0 809.9 1,355.9 540.6 39.9 33.9

II. Regional Transfer & Village Funds 415.5 (9.4) 785.7 804.8 413.6 51.4 (0.5)

1. Transfer to Region 380.3 (7.5) 713.9 736.8 371.9 50.5 (2.2)

2. Village Fund 35.2 (26.4) 71.9 68.0 41.7 61.3 18.2

C. Primary Balance (143.4) (2.5) (431.6) (434.4) 316.1 (72.8) 320.4

D. Surplus (Deficit) (336.7) 2.1 (775.1) (840.2) 106.1 (12.6) 131.5

% to GDP (1.98) (4.57) (4.50) 0.6

E. Financing 449 (10.6) 872 840.2 196.7 23.4 (56.2)

STRONG BUDGET PERFORMANCE CONTINUED IN 2022Revenue is very strong, mainly supported by the economic recovery and global commodity prices

29

The Government revenues grew

significantly, supported by

increased economic activity, the

impact of the implementation of

the HPP Law, and rising

commodity prices.

Budget Financing is managed

efficiently and carefully amidst

global economic uncertainty.

The government expenditures

are directed towards the

distribution of various social

assistance & subsidies, funding

for national strategic projects, as

well as economic recovery

programs, including Transfers to

Regions.

The Budget Surplus and

Primary Balance are still within

the responsive corridor to face

market pressures and the

dynamics of the budget

3030

30

TAX REVENUE GREW OUTSTANDINGLY

The increase in tax revenue has been broad-based in all types and sectors up to July 2022

0.7

-28-3.2 -4.4

18.8 0.3 12.5 24.720.6

186.1

12.3

132.4

9.1

86.6

44.3 46.5

-40

0

40

80

120

160

200

10.3% 4.3% 0.9% 22.6% 4.0% 11.6% 21.0% 14.4%

Income Tax Art 21 Income Tax Art 22(Imported Goods)

Personal IncomeTax

Corporate IncomeTax

Income Tax Art 26 Final Income Tax Domestic VAT Import VAT

Up to July 2021 Up to July 2022

TAXES REVENUE GROWTH BY

TYPES

Share

10 14.1

-2.9

1.8

-10.5

19.1 3.4

-5.2

52.2 66.3

15.1

262.1

12.2 12.6 18.6 22.4

-50

0

50

100

150

200

250

300

29.8% 23.4% 11.2% 9.4% 4.1% 3.5% 3.5% 2.9%

Manufacturing Trade Financial Services& Insurance

Mining Construction &Real Estate

Information &Communication

Transportation &Warehousing

Corporate Services

Share

TAXES REVENUE GROWTH BY

SECTORS

Source: Ministry of Finance 30

TAX REFORM TO STRENGTHEN TAX RATIO AND MAINTAIN FISCAL SUSTAINABILITYTax reform will improve tax collection; anticipate social, economic, and demographic dynamics and implement best practices

31

Progress Update on Tax Reform

Tax Reform Details

GENERAL PROVISIONS

AND PROCEDURES

• Integration of the ID Number

with the Taxpayer Number,

• Appointment of third parties as

withholding, collecting,

depositing and/ or reporting tax

(including e-commerce)

• New bracket for income >IDR 5

billion at 35% tax rate,

• Corporate Income Tax in 2022

remains at 22%,

• Income Tax rate at 0.5% for

MSME (threshold IDR 500million),

• Employee fringe benefits become

tax object.

INCOME TAX VALUE ADDED TAX

• VAT rate hike from 10% to

11% from 1 April 2022, and to

12% by 2025,

• Reducing the VAT

exemptions and facilities.

CARBON TAX

• Introduction of the carbon tax in

2022 in steps according to a

roadmap taking into account the

development of a carbon market,

achievement of NDC targets, sector

readiness, and economic

conditions.

EXCISE

• Strengthening the mechanism

for determining excisable

goods; and applying criminal

sanctions as a last resort in

excise crime.

VOLUNTARY DISCLOSURE

PROGRAM

• Improve taxpayers' compliance

through voluntary disclosure

program for unreported tax

obligations at a final income tax

rate.

247,918Taxpayers

308,059Report

Tax Collected Total Net Assets

IDR61.01T IDR594.82T

Domestic Declaration and Repatriation

Investment


Declaration from overseas

IDR59.91T

1Voluntary Disclosure Program (Jan-June 2022)

2Tax on digital economy

VAT on

Ecommerce

Tax on Fintech

– P2p Lending

Tax on Crypto

Starting May 2022

Starting May 2022

IDR2.47 T

IDR60.83 B IDR12.25 B

IDR23.08 B IDR25.11 B

Domestic Taxpayer

Foreign Taxpayer

Income Tax VAT

3VAT Rate Hike (Starting April 2022)

1.96

5.74 6.25

April May June

(IDR Trillion)

Tax Administration

Reform

Tax Policy Reform

Healthy and Fair Taxation System

3232

Utilizing External and Internal Data, and

AEoI for Core Tax System

Background

THE VOLUNTARY DISCLOSURE (PPS) PROGRAM

32

To accommodate:

1. Tax amnesty participants who have not

declared their assets* in the previous term,

2. Taxpayers who have not disclosed income for

the period 2016 – 2020.

ObjectiveImprove taxpayers' compliance through voluntary disclosure program for unreported tax

obligations at a final income tax rate.

Period 6 Month ( 1 January 2022 – 30 June 2022)

247,918

TAXPAYERS

308,059

DOCUMENTS

Tax Collected Total Net Assets


Domestic Declaration and Repatriation

Investment

IDR512.57T

IDR22.34T

Declaration from overseas

IDR59.91T

Outcome

IDR1,057.43bn | USD11.84 mn

Placement in Gov’t Security (SBN)

Gov’t Bonds Sharia Gov’t Bonds

IDR135.35bn

Timeline for Special Gov’t Bonds for PPS purposes

Sept 2022 Until Sept 2028Sept 2023Jan 2022 Jun 2022

Voluntary Disclosure Program Period

Due date to repatriate assets

to Indonesia

Due date to invest the

assets

SBN will be offered regularly as a

reallocation channel

Tax RateDeclaring foreign

assets

Repatriate foreign assetsDeclare domestic assets

Repatriate foreign assetsInvest domestic assets

11% 8% 6%

18% 14% 12%

NEXT STEP TO INCREASE TAX RATIO

No more Voluntary

Disclosure Program

Supervision and Enforcement

for Better Compliance

3333

8.0 T 13.5 T41.4 T-

2.7 52.3 T

66.0 T

62.5 T60.4 T79.5 T

106.6 T

(0.5)31.7 34.0

2020 2021 2022

PHT DMO PNBP K/L % Growth (YoY)

36.0 T 27.1 T 37.9 T

21.5 T

0.0 T

57.4 T

27.1 T37.9 T

(17.8)(52.8)

39.8

2020 2021 2022

Dividen BUMN Surplus BI % Growth (YoY)

11.6 T 20.1 T

43.9 T3.0 T 3.7 T

4.3 T

14.6 T 23.8 T

48.2 T(23.3)

62.9 102.6

2020 2021 2022

Minerba Nonminerba Growth (%)

13.7 6.6 8.4

30.3 T 41.0 T

83.6 T44.0 T 47.6 T

92.1 T(34.8)8.1

93.6

2020 2021 2022

Gas Bumi Minyak Bumi Growth (%)

NON-TAX REVENUE GREW STRONGLY SUPPORTED BY AN INCREASE ALMOST IN ALL COMPONENTS

SOE’s Dividend

Other Non-Tax Revenue (IDR T)1Public Services Agency (BLU) Revenue (IDR T)1National Separated Asset Revenue (IDR T)1

Non-Oil Gas Revenue (IDR T)1Oil and Gas Revenue (IDR T)1

Natural Gas Oil Minerals & Coal Non-Minerals & Coal

Source: Ministry of Finance, 1Realization up to YTD July33

Revenue

from sale

of mining

products

Revenue

from Line

Ministries

32.6 T

64.3 T52.3 T

33.5 97.4

(18.6)

2020 2021 2022

BLU % Growth (YoY)

343434

MAINTAINED ACCELERATION OF GOVERNMENT SPENDINGThe success of controlling Covid-19 reduces overall costs and increases capacity for other government spending

Capital Spending (IDR T)1 Social Protection Spending (IDR T)1

Subsidy Spending (IDR T)1

Source: Ministry of Finance, 1Realization up to YTD July, *Characterized as PEN Program

146.3116.5 133.2 149.1

4.9

83.8 43.4

0.0

50.0

100.0

150.0

200.0

250.0

2019 2020 2021 2022

Material Spending PEN Program

48.4 46.867.3 70.2

18.5

0.0

20.0

40.0

60.0

80.0

100.0

2019 2020 2021 2022

Capital Spending Project Carryover

123.8 124.0 139.3 141.4

37.885.8

92.4 76.0

0.0

50.0

100.0

150.0

200.0

250.0

2019* 2020 2021 2022Non-PEN Program PEN Program

Material Spending (IDR T)1Personnel Spending (IDR T)1

134.4

144.3

152.0

125.0

130.0

135.0

140.0

145.0

150.0

155.0

2020 2021 2022

Health Spending (IDR T)1

56.2 62.941.6

55.5

5.3 61.2 31.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2019 2020 2021 2022

Related to Covid-19 Spending

Reguler Spending

34

Compensation (IDR T)1

92.2 83.699.6

116.2

0

20

40

60

80

100

120

140

2019 2020 2021 2022

7.5

91.1

48.0

293.5

15.0

104.8

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

2019 2020 2021 2022

Compensation Allocation Realization as of End of July

3535

2021

2022

Revenue Sharing (DBH) General Allocation (DAU)Physical Special Allocation (DAK Fisik) Non- Phyisical Special Allocation (DAK Non Fisik)Incentive for Local Gov't (DID) Special Autonomy & Privilege Allocation for Yogyakarta

UP TO JULY 2022, TRANSFER TO REGION WAS RECORDED LOWER COMPARED TO 2021

Local Government Budget performance needs to be optimized, as the local gov’t saving remains higher

35Source: Ministry of Finance

-0.5 %

Local Gov’t Performance

IDR 415.53 T(52.2% from budget)

IDR 413.6 T(51.4% from budget)

• Local government compliance on

meeting administrative requirements

have improved, driving higher realization

on various items of transfer.

• Several items of transfer realization, such

as DID was lower compared to previous

year, mainly due to lower budget

allocation.

REVENUE• Local Gov’t revenue was

dominated by local tax

(71.9%).

• Local tax performance was

improved and grew high

return to pre-pandemic

level. Tax on consumption

goods booked excellence

performance along with

economic recovery

SPENDING• Up to July, local Gov’t

spending was recorded

lower 6.6% compared to

previous year. The

biggest decline was

contributed by other

expenditures

• The spending reached

36.4% to local budget.

35

2021 2022

Local Tax Retribution

Return of Local Gov't Others Revenue

2021 2022

Personnel Operational Capital Exp Other Exp

3636

BUDGET FINANCING APPLY PRUDENT, FLEXIBLE, AND OPPORTUNISTIC PRINCIPLEFinancing anticipating the ongoing volatility

Source: Ministry of Finance

-18.7 13

487.4

223.9

468.8

236.9

2021 2022

Loan (nett) Securities (nett)

9.5%

Financing Realization Up To 31 July

(49.5%)

(54.1%)

(169.7%)502.7%

5.1%

25% from budget*

INVESTMENT FINANCING

REALIZATION:

IDR 50.0 T**up to 31 July 2022

36

State Asset Management Agency (LMAN) IDR10T

Housing Finance Liquidity Facility (FLPP) IDR 7 T

International Development Fund Cooperation Agency (FLPP) IDR 1 T

Education Fund Management Agency (LPDP) IDR 1 T

Disbursement of Investment Financing allocation is based on performance and priority analysis

Governance is improved with the Key Performance

Indicator (KPI) of Investment Financing

Government Securities IDR 223.9 T(Net)

Loan IDR 13.9 T(Net)

Domestic Loan (Nett)IDR 2.2 T

Foreign Loan (Nett)IDR 10.8 T

• Domestic Loan Withdrawal (Gross) IDR 3.1

• Domestic loan principal installment financing IDR (0.9)

• Foreign Loan Withdrawal (Gross) IDR 54.3

• Foreign loan principal installment financing IDR (43.4)

3737

THE NATIONAL ECONOMIC RECOVERY PROGRAM (PEN) HAS EFFECTIVELY CUSHIONED THE IMPACT OF THE PANDEMIC

The program continues to offer support for communities during hard times and accelerate the economic recovery

37

62.7 216.6 62.5 173 58.4198.5 171 105.4 116.2 67.7

Health Sector Social Protection Priority Programmes Corporation & MSMEs Support Business Incentives

2020

2021NATIONAL ECONOMIC

RECOVERY PROGRAM

(PEN)

2020: 575.9 T

2021: 658.6 T National Economic Recovery Program (PEN) was enacted in response to the Covid-19 pandemic handling and was aimed at saving lives and supporting the economy. In 2021, the initial figures were lower than 2020, however, due to delta

variant outbreak in July, PEN was strengthened for social protection expansion and hospital costs.

ALLOCATION IN 2022:

455.6 T(Realization as of 5 August:

IDR 168.3 T, or 36.9% of the

allocation)

Amidst elevating global uncertainty, the Government optimally carried out the budget as “shock absorber”, through responsive and anticipative PEN program

Health Sector

IDR 122.54 T

Realization: IDR 32.3 T (26.3% of Allocation)

• Patient treatment IDR 20.9 T• Health worker incentives IDR 2.2 T• Vaccination IDR 1.7T• Tax incentives IDR 1.2T• Covid-19 Handling through village

fund IDR 5.6 T

Social Protection

IDR 154.76 T


• PKH IDR 21.3 T, Sembako IDR 23.8 T• Cash Transfer- cooking oil IDR 7.2 T• Cash Transfer- village fund IDR 16.1 T• Cash Transfer–street vendor IDR 1.3T• Preemployment card IDR 8.1 T

Economic Recovery

IDR 178.32 T


• Labor intensive program IDR 10.3T• Tourism and creative economy

IDR2.7 T, Industry zone IDR 0.8 T• Food Security IDR 7.8 T• ICT 5.3 T, MSMEs IDR 14.9 T• Tax incentives IDR 9.9 T, etc

37

3838

MACROECONOMIC ASSUMPTIONS OF THE GOVERNMENT BUDGETGlobal uncertainty remains relatively high

INDICATORS

2021 2022

Budget Outturn BudgetRealization as of July

Outlook(as stated at 1st

Semester Report)

Economic Growth(%, yoy)

5.0 3.69 5.25.44*

(5.23 1st half)4.9 – 5.5

Inflation(%. yoy)

3.0 1.87 3.00.64 (mtm)3.79 (yoy)

3.5 – 4.5

Exchange Rate(IDR/USD)

14.600 14.312 14.35014,875(eop)**14,552(ytd)**

14.300 – 14.700

10-year Govt Securities Interest Rate

(%)

7.29 6.38 6.807.17(eop)***6.91(ytd)***

6.85 – 8.42

ICP(USD/Barrel)

45 68.5 63106.76(avg)104.5(ytd)

95 – 105

Oil Lifting(thousand barrels per day)

705 662* 703596 (eop)****619(ytd)****

635 – 703

Gas Lifting (thousand barrels of oepd)

1,007 982* 1,036945(eop)****959(ytd)****

956 – 1,036

38Source: Ministry of FinanceNote: *Q2 2022 **As of 10 August 2022 ***last auction as of 2 August 2022 **** up to May 2022

393939

MACROECONOMIC ASSUMPTIONS GOVERNMENT BUDGET DRAFT AND

DEVELOPMENT GOALS FOR 2023

Macroeconomic

Assumptions

Indonesia's economic growth is projected to remain relatively

strong, supported by maintained macroeconomic stability amidst

global uncertainty

2022 Outlook 2023*

Economic Growth (%) 5.1 – 5.4 5.3

Inflation (%, yoy) 4.0 – 4.8 3.3

Exchange Rate (IDR/US$) 14,500-14,900 14,750

10-year Govt Securities Interest Rate (%)

6.85 – 8.42 7.9

ICP (US$/barrel) 95 – 105 90

Oil Lifting (rbph) 625 – 630 660

Gas Lifting (rbsmph) 956 – 964 1,050

Target and

Development Indicator

Development targets and development indicators in 2023 are

in line with efforts to encourage more quality and inclusive

economic growth

2023 Government Budget Draft

Unemployment Rate (%) 5.3 – 6.0

Poverty Rate (%) 7.5 – 8.5

Gini Ratio (indeks) 0.375 – 0.378

Human Development Index 73.31 – 73.49

Farmer's exchange rate 105-107

Fisherman's Exchange Rate 107-108

Source: Ministry of FinanceNote: *2023 Government Budget Draft

4040

Account

(IDR T)

2020 2021 2022 2023

Audited Audited BudgetPerpres

98/2022Outlook

Government

Budget Draft

Growth to the

2022 Outlook

(%)

A. Revenue 1,647.8 2,011.4 1,846.1 2,266.2 2,436.9 2,443.6 0.3

I. Tax Revenue 1,285.1 1,547.9 1,510.0 1,784.0 1,924.9 2,016.9 4.8

1. Tax 1,072.1 1,278.6 1,265.0 1,485.0 1,608.1 1,715.1 6.7

2. Customs and Excises 213.0 269.2 245.0 299.0 316.8 301.8 (4.7)

II. Non-tax Revenue 343.8 458.5 481.6 481.6 510.9 426.3 (16.6)

B. Expenditure 2,595.5 2,786.4 2,714.2 3,106.4 3,169.1 3,041.7 (4.0)

I. Central Government 1,833.0 2,000.7 1,944.5 2,301.6 2,370.0 2,230.0 (5.9)

1. Line Ministries 1,059.6 1,190.8 945.8 945.8 1,032.5 993.2 (3.8)

2. Non-Line Ministries 773.3 809.9 998.8 1,355.9 1,337.5 1,236.9 (7.5)

Of which: a. Interest 314.1 343.5 405.9 405.9 403.9 441.4 9.3

b. Energy Subsidy 108.8 140.4 134.0 208.9 208.9 210.7 0.8

II. Regional Transfer & Village Funds 762.5 785.7 769.6 804.8 799.1 811.7 1.6

C. Primary Balance (633.6) (431.6) (462.2) (434.4) (328.4) (156.8) (52.3)

D. Surplus (Deficit) (947.7) (775.1) (868.0) (840.2) (732.2) (598.2) (18.3)

% to GDP (6.14) (4.57) (4.85) (4.50) (3.92) (2.85)

E. Financing 1,193.3 871.7 868.0 840.2 732.2 598.2 (18.3)

1. Debt Financing 1,229.6 870.5 973.6 943.7 757.6 696.3 (8.1)

2. Investment Financing (104.7) (142.5) (182.3) (230.2) (154.2) (176.0) 14.1

Of which: Education Financing 0.0 0.0 (49.5) (97.4) (51.0) (49.5) 0.0

3. Other Financing 70.9 144.4 77.3 127.3 127.8 72.8 (43.3)

2023 GOVERENMENT BUDGET DRAFT TO INCREASE PRODUCTIVITY AND RESPOND TO RISKS OF GLOBAL ECONOMIC UNCERTAINTY

Source: Ministry of Finance28

THANK YOU

macroeconomics and fiscal update

Documents