President of Indonesia Presents IDR 3,123T Budget for 2024

On August 16, Indonesian President Joko Widodo proposed to parliament a budget of 3,304.1 trillion rupiahs (US$216.24 billion) for 2024, his final year in office, promising to protect the economy from global challenges and stabilize food prices. The proposed budget is about 6% larger than this year's spending plans, which have been revised up to 3,123.7 trillion rupiah.

It also assumes 5.2 percent economic growth next year, which is lower than the 5.3 percent target for 2023.  Jokowi, as the president is popularly known, stated that he expects the 2024 budget deficit to be 2.29 percent of GDP, which is roughly the same as the latest forecast for this year's deficit of 2.28 percent.

However, some economists believe the budget assumptions are overly optimistic, given that global growth is expected to remain weak next year.

"The 2024 state budget architecture must be capable of responding to economic dynamics, addressing challenges, and optimally supporting the development and welfare agenda," Jokowi said in his annual budget speech to parliament, a day before Indonesia's independence anniversary.

The president made no specific fiscal policy announcements for 2024, but he emphasized the importance of food and energy security, as well as developing a competitive defense industry, in the face of global supply chain disruption caused by geopolitical fragmentation.

Jokowi proposed allocating 108.8 trillion rupiah for food security in order to keep prices stable, increase farm output, and expand the government's ongoing food estate program.

Infrastructure was allocated 422.7 trillion rupiah, including for Jokowi's flagship project, Nusantara, to build a new capital city on Borneo island.

Jokowi has previously stated that he intends to relocate some government offices from Jakarta to Nusantara next year.

The budget proposal calls for government revenues to rise 5.5% next year to 2,781.3 trillion rupiahs, up from 2,637.2 trillion rupiahs this year.