Macroscope

Macroscope
Economic | 18 August
Research 2021 2021
| 18 August

2022 Draft Budget: A Conservative and Sensible Budget

2022 Draft Budget has been published. The government has officially proposed the
Economic Forecast 2022 Draft Budget (RAPBN 2022), which focuses on healthcare & social reform and
infrastructure development (especially digital and green economy), followed by
2019 2020 2021F
continuing other reform agendas that were set before COVID-19. As the economy is
Real GDP (%) 5.02 -2.07 3.69
expected to have better footing next year, the government has proposed a lower budget
GDP/capita (US$) 4,175 3,912 4,243
deficit of 4.85% of GDP (vs. our and government’s 2021 outlook at 5.90% and 5.82% of
Inflation (%) 2.72 1.68 2.30 GDP, respectively), reflecting a gradual fiscal consolidation.
7-DRRR 5.00 3.75 3.50
CAD/GDP (%) -2.72 -0.45 -1.90
More optimistic macro assumption. The economic growth assumption is established at
5.0–5.5% in 2022 from 3.7–4.5% in 2021, with private consumption and investment as the
Rupiah – Avg (IDR/USD) 13,866 14,543 14,085
main drivers. The macro stability is also expected to remain sound despite potential
global monetary tightening, reflected from stable rupiah and 10-year government bond
yield assumptions (see exhibit 1). In the medium term, the government plans to shift the
economic structure from consumption-based to investment- and export-based. This is
reflected in the economic development focus on green & sustainable economy,
digitalization, and downstream of natural resource sectors.

EXHIBIT 1. MACRO ASSUMPTION SHOWS THE GOVERNMENT’S OPTIMISTIC EXPECTATION FOR

NEXT YEAR

The Macro Assumptions of 2022 Draft Budget (1)

The Macro Assumptions of 2022 Draft Budget (2)

Leo Putera Rinaldy
Chief Economist
+6221 5296 9406
leo.rinaldy@mandirisek.co.id

Imanuel Reinaldo
Economist
+6221 5296 9651
Imanuel.reinaldo@mandirisek.co.id Sources: Ministry of Finance

Large contingency fund. On fiscal expenditure, the amount proposed is relatively similar
to the government’s outlook this year, with lower healthcare, social safety net, and
infrastructure allocations (see exhibit 2–3). The PEN stimulus is also set at Rp321tn in the
2022 budget (excluding below-the-line and tax incentives), which is lower than this year
at Rp483tn. Specifically, the PEN’s healthcare and social stimuli are set to decrease by
-31% and -18% (see exhibit 9–10), respectively, suggesting expectations of flattening

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 Macroscope | 18 August 2021

COVID curve, better vaccination rate, and strong private sector recovery next year.
Furthermore, the government has acknowledged the still highly uncertain environment
and allocated a large buffer or contingency fund in the budget’s “other expenditure” post
to manage potential downside risks on the economy and/or COVID-handling. This post is
slated to increase by 128.4% compared to this year’s outlook realization, accounting for
8% of the total fiscal spending.

EXHIBIT 2. THE TOTAL FISCAL EXPENDITURE IS EXPECTED TO BE FLAT NEXT YEAR

Total Expenditure Central Government Expenditure

3,000 2,750 2,697 2,709 14% 2,500 25%
2,595 22.5%
2,309 12%
2,500 2,213 2,000 1,833 1,927 1,955 1,938 20%
2,007 12.4%
1,864 10%

Growth (% YoY)

Growth (% YoY)
2,000 1,455 1,496 15%
10.3%
8% 1,500 1,265
Rp tn

1,154 15.0%

Rp tn
1,500 7.7% 10%
6% 9.6% 6.6%
1,000
1,000 3.9% 5%
4%

Outlook
Outlook

4.3% 0.6%
500 2.8%
Initial

Initial
500 3.2% 2% 0%
0.4% 0% -2.5%
- - -5%
2016 2017 2018 2019 2020 2021 2022 Draft 2016 2017 2018 2019 2020 2021 2022 Draft
Govt Budget Govt Budget
Outlook Outlook
Realization / Initial Budget Outlook Growth - RHS Realization / Budget Outlook Growth - RHS

Source: Ministry of Finance

EXHIBIT 3. HEALTHCARE, SOCIAL, AND INFRASTRUCTURE SPENDING SET TO DECLINE IN 2022, WHILE “OTHER” SPENDING POST IS
PLANNED TO INCREASE

Healthcare Spending (Rp tn) Social Safety Net Spending (Rp tn)
350 326 100%
550 498 488 80%
300 89.4% 80%
255 61.5% 428
450 60%
250 51.7% 60% 368
201 217 185
200 172 170 40% 350 308 154 40%
116
52 125
150 114 61 25 20% 250 20%
5.0%
100 -1.5% 0%
4.2% 150
256 281 303 274 0%
114 112 125 139 243
50 144 -20% -2.0%
-21.8% 50 -12.4% -20%
0 -40% -26.1%
2019 2020 2021 Budget 2021 Govt 2022 Draft -50 2019 2020 2021 Budget 2021 Govt 2022 Draft -40%
Outlook budget Outlook budget

Non PEN PEN Growth (% YoY - RHS) Non PEN PEN Growth (% YoY - RHS)

Infrastructure Spending Other Spending

450 417 60% 926.0%
394 394 384 250 1000%
400 381 50% 213
350 48.5% 40% 200 800%
41.7% 281
Growth (% YoY)

269 30%
Growth (% YoY)

300 600%
20% 150
250 120
Rp tn

3.4%
Rp tn

10% 93 400%
200 -7.9% 0% 100
150 0.0% 83.6% 128.4%
-5.1% -10% 46.1% 200%
100 -20% -27.6%
50 0%
50 -30% 9 16 12
-28.6% -22.4%
- -40% - -200%
2016 2017 2018 2019 2020 2021 2022 Draft 2017 2018 2019 2020 2021 2022 Draft
APBN Budget Govt Budget
initial Outlook
Realization / APBN Initial Growth - RHS Realization / APBN Initial Growth - RHS

Source: Ministry of Finance

Conservative revenue target: tax reform, tax incentive, and commodity price. The
government proposed the total revenues and tax to increase, each by 6.0% and 9.5% (see
exhibit 4), which could be slightly higher at 7% and 10.7%, based on our calculation, as

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 Macroscope | 18 August 2021

we expect a larger revenue shortfall this year. Interestingly, if we compare them to the
GDP, the total revenues and tax are expected to reach 10.3% and 8.4% in 2022,
respectively, which are considered conservative, as the ratios are lower than the 12.4%
and 9.8% of GDP in 2019 (pre-COVID period) (see exhibit 5). We think this is due to
several potential factors: i.) Either the government decides not to fully incorporate the tax
reform in the 2022 budget owing to economic factors, or it has not fully incorporated the
reforms, as the tax law is still being discussed with the parliament. ii.) Implementation of
incentives, including the automatic corporate income tax cut from 22% to 20% effective
next year (we estimate a potential loss of around Rp20tn). iii.) Flat or lower commodity
prices amid the normalization of global growth; specific on excise, the government plans
to implement excise on plastic products and increase the excise tariff policy for tobacco
(see exhibit 6).

EXHIBIT 4. GOVERNMENT REVENUE EXPECTED TO HAVE MODEST INCREASE IN 2022

Government Revenue & Grants Tax

2,500 16.6% 20% 1,800 13.0% 15%
1,600 1,519 1,546 1,445 1,507
15% 1,376 10%
2,000 1,944 1,961 1,841 1,344 9.5%
1,400 1,285 1,285
1,744 1,736 10% 5%
7.1%

Growth (% YoY)
1,666 1,648 1,200 1.8%
1,556 6.0% 4.6%
Growth (% YoY)

7.1% 5% 3.6% 0%
1,500 1,000
Rp tn

Rp tn

5.3%
3.2% 0.9% 0% 800 -5%
1,000 -5%
600
-10%

Outlook
400

Initial
-10% -15%
Outlook

500 200
Initial

-16.9%
-15% 0 -20%
-16.0%
0 -20% 2016 2017 2018 2019 2020 2021 2022 Draft
Govt Budget
2016 2017 2018 2019 2020 2021 2022 Draft
Govt Budget Outlook
Realization / Budget Outlook Growth - RHS Outlook Realization / Budget Outlook Growth - RHS

Source: Ministry of Finance

EXHIBIT 5. 2022 REVENUE AND TAX RATIO TO GDP ARE STILL EXHIBIT 6. EXCISES REVENUE IS SLATED TO INCREASE BY 11.9%
PROJECTED TO BE BELOW 2019 LEVEL IN 2022

Revenue and Tax Ratio to GDP Excises Duties

14 13.10 250 14%
13 12.26 12.38 204 12%
200 176 182
12 172 11.9%
10.68 10.51 160 10%

Growth (% YoY)
10.28 153
11 144
150 8%
10
Rp tn

9 10.24 8.0% 6%
9.89 9.76 100 6.8%
8 3.3% 4%
8.33 8.33 8.42 50 4.1%
7 2%
2017 2018 2019 2020 2021 2022 Draft 2.3%
0 0.8% 0%
Govt Budget
Outlook 2016 2017 2018 2019 2020 2021 2022 Draft
Govt Budget
Revenue (% of GDP) Tax (% of GDP) Outlook
Realization / Budget Growth - RHS

Source: Ministry of Finance, Mandiri Sekuritas Source: Ministry of Finance

What is the financing plan? Given the fiscal revenue and spending structure, the fiscal
deficit is expected to narrow to -4.85% in 2022 (vs. government’s outlook at -5.82% of
GDP in 2021) or equivalent to Rp868tn. This is expected to be followed by the
government’s financing, reaching Rp182.3tn, partly consisting of the government’s
capital injection to SOEs and financing for the PEN stimulus (see exhibit 7 and 14).
Therefore, the government plans to issue bonds amounting to Rp991.3tn net (usually
with 15–20% in global bonds, based on our estimation), with negative net bilateral and
multilateral loans (see exhibit 8). The mechanism where BI acts as a standby buyer in the
primary bond auction remains intact next year. Furthermore, we estimate a potential
accumulated excess financing of >Rp100tn going into 2022.

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We cannot rule out possible budget changes. All in all, keep in mind that the budget
discussion has just started with the parliament, and the process will usually need two
months (the approved budget will likely be announced in the first or second week of
October). We believe the budget numbers could change. On the revenue side, the
changes could somewhat depend on the ongoing tax law discussion between the
government and the parliament, in our opinion. Meanwhile, on the spending side, the
changes will be determined by the economic and healthcare dynamics heading to 4Q21.
A rising downside risk on the economy or COVID handling could lead to reallocations of
several budget posts, including the “other expenditure” post.

EXHIBIT 7. FISCAL DEFICIT SET TO NARROW FURTHER TO -4.85% OF GDP IN 2022

Budget Deficit
0 0.00%
-341 -124 -269 -11 -353 -73 -948 -634 -961 -595 -868 -462
-200 -1.00%
-2.00%
-400 -1.82%

% of GDP
-2.23% -3.00%
-2.51%
Rp tn

-600
-4.00%
-800
-5.00%
-1000 -4.85%
-6.00%
-6.14% -5.82%
-1200 -7.00%
2017 2018 2019 2020 2021 Gov't 2022 Draft
Outlook Budget

Fiscal Balance Primary Balance in % of GDP - RHS

Sources: Ministry of Finance

EXHIBIT 8. DETAILS ON GOVERNMENT FINANCING

2021 2022
In Rp tn 2017 2018 2019 2020
Gov’t Outlook Draft Budget
Debt Financing 428.49 372.03 437.54 1,229.63 1,026.99 973.58
Bonds 441.83 358.40 446.29 1,177.15 992.84 991.29
Loan (13.33) 13.63 (8.75) 52.48 34.14 (17.71)
Domestic Loan 0.06 1.35 3.03 2.36 0.98 1.75
Overseas Loan (13.40) 12.28 (11.78) 50.11 33.17 (19.46)
Investment Financing (59.75) (61.11) (49.39) (104.70) (204.55) (182.32)
Loan Provision (2.05) (4.27) (1.28) 1.01 1.76 0.59
Loan Guarantee (1.01) (1.12) (3.59) (2.72) (1.13)
Other Financing 0.36 0.17 15.18 70.94 140.01 77.30
Total Government Financing 366.04 305.69 402.05 1,193.29 961.49 868.02

Source: Ministry of Finance

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EXHIBIT 9. HEALTHCARE STIMULUS BUDGET IS REDUCED BY -31% FOR 2022

2021 2022
Healthcare Stimulus % Change Details
(Rp tn) (Rp tn)
Vaccine procurement: Rp38.4tn (189mn
people)
Vaccination 57.8 47.9 -17.1%
Central Govt’s vaccination support: Rp3.0tn
Vaccination process in regions: Rp6.5tn
Diagnostic 4.1 4.5 10.3% Testing and tracing
15% cost sharing with BPJS for 250,000
COVID-19 Patient Treatment 65.9 14.9 -77.4%
patients
Central Government: Rp6.4tn
Medical Personnel Incentives 18.4 12.5 -32.1%
Regional Governments: Rp6.1tn
COVID-19 Medicines 1.2 1.0 -14.5% 4mn packages
Earmarked regional transfer post in state
COVID-19 Handling in Regions 34.7 26.2 -24.5%
budget
Others 32.9 41.1 24.7%
Total 215.0 148.1 -31.1%
Source: Coordinating Ministry of Economic Affairs

EXHIBIT 10. SOCIAL SAFETY NET BUDGET IS DECREASED AMID THE BETTER ECONOMY NEXT YEAR
Program Comparison Budget (in Rp Tn)
Social Safety Net
2021 Change
Stimulus 2021 Outlook 2022 Draft Budget 2022
Outlook
Recipients: 10mn households (eq. Recipients: 10mn households (eq.
Family Hope 40mn people) 40mn people)
28.3 28.7 1.4%
Program Total aid: Total aid:
Rp2.83mn/HH/year on average Rp2.87mn/HH/year on average
Recipients: 18.8mn households (eq.
Recipients: 18.8mn households (eq.
75.2mn people)
75.2mn people)
Total aid:
Food aid Total aid: 49.9 45.1 -9.7%
- Rp200,000/HH/month for FY 2021
- Rp200,000/HH/month for FY 2022
- Additional Rp200,000/HH/month
for Jul–Aug
Recipients: 8.4mn people
Total aid:
Rp600,000/HH/month for 4 months
Rp1,000,000 for training
Pre-Work Card Rp150,000 for survey To be disclosed 30.0 11.0 -63.3%

Added by Wage Subsidy:

Recipients: 7mn–8mn people
Rp600,000/person for 2 months
Job Loss
To be disclosed 5.6
Insurance
Recipients: 8mn households (eq.
Cash Transfer 32mn people)
To be disclosed 28.8 27.2 -5.6%
Village Funds Total aid:
Rp300,000/HH/month for FY2021
Recipients: 10mn households (eq.
Recipients: 10mn households (eq.
40mn people)
40mn people)
Cash Transfer Total aid: 17.5 12.0 -31.2%
Total aid:
Rp300,000/HH/month for 6 months
Rp200,000/HH/month for 6 months
(Jan–Apr + May–Jun, paid in Jul)
Recipients: 5.9mn households (eq.
23.6mn people)
Food Aid PPKM 7.1
Total aid:
Rp200,000/HH/month for 6 months
Internet Quota Recipients: 38.1mn students/teachers
To be disclosed 8.5 8.1 -5.0%
Subsidy for 6 months
Others / Reserve Electricity discount, reserve Reserve 24.8 9.0 -63.9%
Total Social Safety Net Stimulus 187.8 153.7 -18.1%
: Optional
Source: Coordinating Ministry of Economic Affairs

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EXHIBIT 11. GOVERNMENT EXPENDITURE BASED ON PRIORITY SECTORS

2021 2021 2022

Spending by 2020
Initial Govt Draft Details
Sector Realization
Budget Outlook budget

1.) Continuing COVID-19 handing and vaccination

2.) Healthcare system reform (primary service transformation,
healthcare security transformation, medical personnel quality
Healthcare 172.3 169.7 326.4 255.3
improvement, IT utilization)
3.) Accelerating stunting alleviation
4.) Sustaining national healthcare insurance (JKN) program

1.) Improving database

2.) Reforming social safety net program gradually
3.) Supporting Job Loss Insurance
Social Safety
498 368 487.8 427.5 4.) Improving social safety net implementation and developing
Net
adaptive social program schemes
5.) Continuing social safety net programs through social aid, subsidy,
and village fund cash transfers

1.) Basic utilities infrastructure (2,250 special houses, 3,501 flats,

222,425 units of water supply system)
2.) Providing affordable energy and food infrastructure (10,000 units
household gas distribution, 105,000 ha irrigation system)
Infrastructure 281 417 384.8
3.) Improving connectivity infrastructure (205 km new road, 8,244 m
new bridge, Trans-Sumatera Toll Road, 6,624 sp railroad, 6 new
airports)
4.) ICT access (2,344 BTS in remote area)

1.) Providing internet access in 20,965 public locations

2.) Procuring multifunction satellite
ICT 7.2 23.4 27.4
3.) Developing National Data Center
4.) Utilizing Palapa Ring

1.) Supporting food production (paddy 57.5 tons, corn 26mn tons,
Meat 0.59mn tons
Food Security 80 92 92.4 76.9
2.) Developing food infrastructure
3.) Providing food production equipment

Source: Ministry of Finance

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EXHIBIT 12. MINISTRY OF DEFENSE AND POLICE HAVE THE HIGHEST BUDGET ALLOCATIONS NEXT YEAR

2021 Outlook 2022 Draft Budget

Budget Budget
Ministries/Institutions Ministries/Institutions
(Rp tn) (Rp tn)
Ministry of Health 176.0 Ministry of Defence 133.9
Ministry of Public Works and Housing 130.5 Police 111.0
Ministry of Defence 118.2 Ministry of Public Works and Housing 100.6
Ministry of Social Affairs 106.0 Ministry of Health 96.1
Police 96.9 Ministry of Social Affairs 78.3
Ministry of Education, Culture, Research 78.2 Ministry of Education and Culture 73.0
Ministry of Religion 66.0 Ministry of Religion 66.5
Ministry of Finance 56.8 Ministry of Finance 43.0
Ministry of Transportation 32.9 Ministry of Transportation 32.9
Ministry of Information & Communication 17.7 Ministry of Information & Communication 21.8
Others 180.2 Others 183.5
Total Ministries/Institutions Spending 1059.4 Total Ministries/Institutions Spending 940.6

Source: Ministry of Finance

EXHIBIT 13. DETAILS ON GOVERNMENT SUBSIDY

2017 2018 2019 2020 2021 2022

Subsidy Components
Realization Realization Realization Realization Outlook Draft Budget
Energy Subsidy 97.6 153.5 136.9 97.4 128.5 134.0
Fuel 8.3 38.9 30.1 14.9 17.0 11.3
LPG 3 kg 38.7 58.1 54.2 32.8 49.9 66.3
Electricity 50.6 56.5 52.7 49.7 61.5 56.5

Non Energy Subsidy 68.8 63.4 64.9 98.8 120.1 72.92

Fertilizer 28.8 33.6 34.3 34.2 29.1 25.3
Public Service Obligation 4.3 4.2 4.1 4.9 6.0 6.0
KAI 2.1 2.1 2.2 2.5 3.7 3.5
Pelni 2.1 1.9 1.8 2.0 2.1 2.3
Other PSO 0.1 0.2 0.2 0.2 0.2 0.2
Interest Subsidy Programs 4.8 14.2 14.0 52.7 29
59.7
Others 30.8 11.4 12.5 32.4 12.7

Total Subsidy 166.4 216.9 201.8 196.2 248.6 207.0

Source: Ministry of Finance

EXHIBIT 14. INVESTMENT FINANCING FOR INFRASTRUCTURE IS SET TO IMPROVE IN 2022

2021 2022
2017 2018 2019 2020
Outlook Draft Budget
Infrastructure cluster
(HK, PLN, Waskita, Adhi, Penjaminan 41.6 39.4 35.0 28.3 76.3 86.4
Infrastruktur, Perumnas, FLPP, etc.)
Education cluster
10.5 15.0 6.0 18.0 29.0 20.0
(LPDP)
International Cooperation Cluster
(LDKPI, investment in international 2.0 3.3 4.3 0.7 2.9 1.9
organization)
Social Protection Cluster
3.0
(BPDLH => natural disaster handling fund)
Other
5.7 3.4 4.1 57.7 96.3 71.0
(inc. financing reserve)
Total Investment Financing 59.8 61.1 49.4 104.7 204.5 182.3

Source: Ministry of Finance

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EXHIBIT 15. DETAILS ON 2022 DRAFT FISCAL BUDGET

2021 2022 2021 2022

2018 2019 2020 2018 2019 2020
Rp tn Gov’t Draft Gov’t Draft
Realization Realization Realization Realization Realization Realization
Outlook Budget Outlook Budget

A. Revenue and Grant 1,943.67 1,960.63 1,647.8 1,735.7 1,840.7 16.6% 0.9% -16.0% 5.3% 6.0%

I. Domestic Revenue 1,928.1 1,955.1 1,628.9 1,733.0 1,840.1 16.5% 1.4% -16.7% 6.4% 6.2%

1. Tax revenue 1,518.8 1,546.1 1,285.1 1,375.8 1,506.9 13.0% 1.8% -16.9% 7.1% 9.5%

a. Domestic tax 1,472.9 1,505.1 1,248.4 1,324.7 1,466.8 12.9% 2.2% -17.1% 6.1% 10.7%

Income tax 739.9 772.3 594.0 615.2 680.9 16.0% 4.4% -23.1% 3.6% 10.7%

Oil and gas 64.70 59.15 33.0 45.8 47.3 28.6% -8.6% -44.2% 38.6% 3.4%

Non-oil and gas 675.17 713.12 561.0 569.4 633.6 14.9% 5.6% -21.3% 1.5% 11.3%

Value Added Tax 537.27 531.58 450.3 501.8 552.3 11.8% -1.1% -15.3% 11.4% 10.1%

Land and Building Tax 19.44 21.15 21.0 14.8 18.4 15.9% 8.7% -0.9% -29.2% 23.8%

Excise 159.6 172.4 176.3 182.2 203.9 4.1% 8.0% 2.3% 3.3% 11.9%

Other taxes 16.74 7.68 6.8 10.6 11.4 6.8% -54.1% -11.5% 56.7% 7.0%

b. International Trade Duty 45.9 41.1 36.7 51.2 40.1 17.0% -10.5% -10.6% 39.4% -21.7%

Import duty (RHS) 39.12 37.53 32.4 33.2 35.2 11.6% -4.1% -13.5% 2.2% 6.0%

Export duty 6.77 3.53 4.3 18.0 4.9 63.1% -47.9% 21.3% 320.8% -72.7%

2. Non-tax revenue 409.3 409.0 343.8 357.2 333.2 31.5% -0.1% -15.9% 3.9% -6.7%

a. Natural Resources Revenue 180.6 154.9 97.2 130.9 121.9 62.5% -14.2% -37.2% 34.7% -6.9%

Oil and gas 142.79 121.09 69.1 94.9 85.9 74.5% -15.2% -43.0% 37.4% -9.5%

Non-oil and gas 37.80 33.81 28.1 36.0 36.0 29.1% -10.6% -16.7% 27.9% 0.2%

b. SoEs Profit Share 45.06 80.73 66.1 30.0 35.6 2.6% 79.2% -18.1% -54.6% 18.6%

c. Other non-tax revenues 55.09 124.50 111.2 117.9 96.8 16.4% 126.0% -10.7% 6.1% -17.9%

d. Public Service Agency 128.57 48.87 69.3 78.3 78.8 18.1% -62.0% 41.8% 13.0% 0.6%

II. Grant 15.56 5.50 18.8 2.7 0.6 33.8% -64.7% 242.6% -85.7% -78.5%
B. Government Expenditure 2,213.1 2,309.3 2,595.5 2,697.2 2,708.7 10.3% 4.3% 12.4% 3.9% 0.4%

I. Central Government Expenditure 1,455.3 1,496.3 1,833.0 1,927.0 1,938.3 15.0% 2.8% 22.5% 5.1% 0.6%
1. Personnel expenditure (RHS) 346.9 376.1 380.5 399.3 426.8 10.9% 8.4% 1.2% 4.9% 6.9%
2. Material expenditure 347.5 334.4 422.3 410.9 337.8 19.2% -3.8% 26.3% -2.7% -17.8%
3. Capital expenditure 184.1 177.8 190.9 215.1 196.6 -11.8% -3.4% 7.4% 12.7% -8.6%
4. Interest payment 258.0 275.5 314.1 366.2 405.9 19.1% 6.8% 14.0% 16.6% 10.8%
5. Subsidy 216.9 201.8 196.2 248.6 207.0 30.3% -7.0% -2.8% 26.7% -16.7%
a. Energy subsidy 153.5 136.9 97.4 128.5 134.0 57.2% -10.8% -28.8% 31.9% 4.3%
b. Non-energy subsidy 63.4 64.9 98.8 120.1 72.9 -7.9% 2.5% 52.2% 21.5% -39.3%
6. Grants Expenditure 1.5 6.5 6.3 6.5 4.8 -72.1% 325.9% -3.1% 3.2% -25.5%
7. Social assistance 84.3 112.5 202.5 187.1 146.5 52.5% 33.4% 80.1% -7.6% -21.7%
8. Other expenditures 16.2 11.7 120.0 93.2 212.9 83.6% -27.6% 926.0% -22.4% 128.4%

II. Transfer to Region and Village Fund 757.8 813.0 762.5 770.3 770.4 2.1% 7.3% -6.2% 1.0% 0.0%
1. Transfer to region 697.93 743.16 691.4 698.4 702.4 2.3% 6.5% -7.0% 1.0% 0.6%
2. Village fund 59.86 69.81 71.1 71.9 68.0 0.2% 16.6% 1.8% 1.1% -5.4%
C. PRIMARY BALANCE (11.5) (73.1) (633.6) (595.3) (462.2)
D. FISCAL SURPLUS/DEFICIT (A-B) (269.4) (348.7) (947.7) (961.5) (868.0)
As a percentage of GDP -1.82% -2.20% -6.14% -5.82% -4.85%

Source: Ministry of Finance

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Macroscope | 18 August 2021

MACROECONOMIC INDICATORS AND FORECAST

2015 2016 2017 2018 2019 2020 2021F

National Account
Real GDP (% yoy) 4.88 5.03 5.07 5.17 5.02 -2.075 3.69
Real Consumption: Private (% yoy) 4.96 5.01 4.94 5.05 5.04 -2.63 2.24
Real Consumption: Government (% yoy) 5.31 -0.14 2.13 4.80 3.25 1.94 5.71
Real Gross Fixed Capital Formation (% yoy) 5.01 4.47 6.15 6.67 4.45 -4.95 4.62
Real Exports (% yoy) -2.12 -1.66 8.91 6.48 -0.87 -7.70 13.82
Real Imports (% yoy) -6.25 -2.41 8.06 12.00 -7.69 -14.71 15.05
GDP (Rp tn) - nominal 11,541 12,407.00 13,588.80 14,837.40 15,833.90 15,434.15 16,360.20
GDP (US$ bn) - nominal 861.9 932 1,015 1,042 1,119 1,059 1,154
GDP per capita (US$) - nominal 3,377 3,589 3,847 3,945 4,175 3,912 4,243

External Sector
Exports (% yoy) - Merchandise -15.4 -3.2 17 7.01 -6.78 -3.04 6.00
Imports (% yoy) - Merchandise -19.7 -4.6 16 20.7 -8.85 -18.07 16.90
Trade Balance (US$ bn) 13.3 15.4 18.8 -0.43 1.65 28.2 13.4
Current Account (% of GDP) -2.03 -1.82 -1.60 -2.94 -2.72 -0.45 -1.90
Current Account (US$ bn) -17.6 -16.3 -16.2 -31.1 -30.4 -4.7 -22.2
Rp/US$ (period average) 13,458 13,308 13,398 14,247 14,141 14,543 14,085
Rp/US$ (year end) 13,795 13,436 13,548 14,390 13,866 14,050 14,177

Other
BI rate (% year end) 7.5
BI 7 days reverse repo rate (% year end) 4.75 4.25 6.00 5.00 3.75 3.50
Headline Inflation (% yoy, period average) 6.4 3.5 3.81 3.2 3.03 2.04 1.74
Headline Inflation (% yoy, year end) 3.35 3 3.61 3.13 2.72 1.68 2.30
S&P’s Rating - FCY BB+ BB+ BBB- BBB- BBB BBB BBB
S&P’s Rating - LCY BBB- BBB- BBB- BBB- BBB BBB BBB

Source: CEIC, Mandiri Sekuritas estimates

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ECONOMIC AND FIXED INCOME RESEARCH TEAM

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Credit Analyst
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