Republic of Indonesia Presentation Book - June 2023

Republic of Indonesia
Strengthening Policy Synergy to Maintain Stability while

Advancing the Economy amid Escalating Uncertainty and
Declining Global Growth
June 2023
About Investor Relations Unit of the Republic of Indonesia
Investor Relations Unit (IRU) of the Republic of Indonesia has been established as a joint effort between Coordinating Ministry of
Economic Affairs, Ministry of Finance and Bank Indonesia since 2005. The main objective of IRU is to actively communicate
Indonesian economic policy and to address concerns of investors, especially financial market investors.
As an important part of its communication measures, IRU maintains a website under Bank Indonesia website which is administered
by International Department of Bank Indonesia. However, day-to-day activities of IRU are supported by all relevant government
agencies, among others: Bank Indonesia, Ministry of Finance, Coordinating Ministry for Economic Affairs, Ministry of Investment,
Financial Services Authority, Ministry of State-Owned Enterprises, and The Committee for Acceleration of Priority Infrastructure
Delivery.
IRU also convenes an investor conference call on a monthly basis, answers questions through email, telephone and may arrange
direct visit of banks/financial institutions to Bank Indonesia and other relevant government offices.
Published by Investor Relations Unit – Republic of Indonesia
Website: http://www.bi.go.id/en/iru/default.aspx
Contact:
Rosita Dewi (International Department - Bank Indonesia, Ph.: +6221 2981 8232)
Thasya Pauline (Deputy Ministry for Macroeconomic and Finance Coordinator - Coordinating Ministry for Economic Affairs, Ph. +6221 352 1843)
Putri Rizki Yulianti (Fiscal Policy Office - Ministry of Finance, Ph.: +6221 345 0012)
Subhan Noor (Directorate General of Budget Financing and Risk Management - Ministry of Finance, Ph.: +6221 351 0714)
E-mail: contactIRU-DL@bi.go.id
This Presentation Book also can be downloaded from: https://www.bi.go.id/en/iru/presentation/default.aspx

1
Highlight of the Month
What’s New Prudent Pandemic Management

and Continued Economic Recovery
Economic Recovery
Program and Its Updates
…page 5-9
Continued National economic
recovery momentum, reflected by
5.03% (yoy) economic growth in first
quarter of 2023, driven by high
exports and growing domestic
demand in.
Affirmation of Investment Grade

Sovereign Credit Rating
Fiscal & Financing Policy Investment grade ratings affirmed by Fitch on
Update December 14, 2022 recognizing macro stability
and optimism on the growth prospect, as well
…page 97-116 as policy credibility in handling COVID-19
pandemic. Moody's has also emphasized in
their Annual Credit Analysis by Moody’s at 1st
BBB (Stable) of March 2023 that Indonesia's GDP growth has
Bank Indonesia Board of returned close to its 2010-2019 pre-pandemic
Meeting Decision average of around 5%, driven by robust private
consumption and investment, as well as strong
…page 119 commodity price. Meanwhile, the stable
outlook that reflects the expectation that
reform implementation will continue at a
steady, gradual pace.
2
Overview
1 4
External Factor:
Economic Recovery Program and Its Updates Improved External Resilience
Accelerated Reforms Agenda Supported by Fiscal Performance and Flexibility:

2 Institutional Improvement and Progressive
Infrastructure Development
5 Strong Commitment in Maintaining
Fiscal Credibility
Economic Factor: Monetary and Financial Factor:

3 Improved Growth Prospects Supported by
Continued Economic Recovery Momentum
6 Credible Monetary Policy Track Record
and Favorable Financial Sector
3
Section 1
Economic Recovery Program and Its Updates
Constructive Policies, The Key To Successful Indonesia's
Economic Recovery
In the midst of being exposed to various global challenges, the government has succeeded in ensuring that the economic
recovery continues, while maintaining an effective handling of the pandemic.
Indonesia's Exit Strategy

is starting to move >445 million COVID-19 vaccines have been
BRAKE towards economic administered (main and booster doses). Indonesia
recovery phase has produced the COVID-19 vaccine domestically, to
strengthen the supply of vaccines, including Indovac
developed by Bio Farma.
Handling Covid,
Detection, Therapeutic Covid-19 Case Trajectory
Growth: Vaccination, Health Protocol
6% - 7% (PPKM) Vaccination
Growth: Economic growth fell /
Sustainability Revoked the
5% Effective and
Unemployment and
widespread PPKM rules
poverty rates rose
economic recovery
program (PEN)
Growth: 3%
President Joko Widodo on 30 December 2022
SPEED Growth: officially announced that PPKM had been
repealed. However, the Pandemic status in
UP -5.3 %
Indonesia was not revoked.
Source: Coordinating Ministry for Economic Affairs 5

National Economic Recovery Program (PEN) Effectively
Assist the Covid-19 Handling & Promote Economic Recovery
PEN PROGRAM
as a response to the
handling of the Covid- PRIORITY SUPPORT
PEN 2020 HANDLING SOCIAL MSMEs BUSINESS
19 pandemic and aims PROTECTION
PROGRAM
HEALTH AND CORPORATE INCENTIVES
575.9 to handle health and
62.7 Trilion 216.6 Trilion
65.2 Trilion 58.4 Trilion
Trilion support the economy 173.0 Trilion
PEN 2021 BUDGET

BUSINESS PRIORITY SOCIAL HANDLING PEN 2021
SUPPORT MSMEs Initially lower than in
PROGRAM
INCENTIVES
67.6 Trilion
AND CORPORATE
105.6 Trilion
PROTECTION
167.7 Trilion
HEALTH
655.14 2020. However, as
116.1 Trilion 198.1 Trilion Trilion the covid-19 cases
escalated due to the
Delta variant, PEN
was again
strengthened for
social protection and
PEN 2022 HANDLING SOCIAL STRENGTHENING hospital costs
HEALTH SAFETY NET ECONOMIC RECOVERY
455,62 122,5 Trilion
154,8 Trilion
178,3 Trilion
Trilion
Focus: Continuation of Covid handling Focus: maintaining the purchasing Focus: Job Creation and Increased Productivity
and acceleration/expansion of power of the poor and vulnerable, as
vaccinations well as tackling extreme poverty

Achievements and Experiences in the Implementation of Covid-19
Pandemic Management Program and National Economic Recovery
PC-PEN is an embodiment of policies that are extraordinary, responsive and adaptive in responding to the dynamics of crisis
and risk of uncertainty.
Under the directions of the President, the combination of brakes and accelerator proved
1 to be optimal. Dare to take risks, but measured.
PERPPU No 1 of 2020 provides responsible discretion. During the COVID-19 pandemic

2 crisis period, support was not only needed by the poor but also the lower middle class.
3 Data availability & quality are important in formulating policies.
Intensive coordination between the Central Government, Regional Governments and

4 the TNI/Polri as well as the involvement of all elements of society. The formulation of
programs for ministries/institutions and local government may no longer be business as
usual.
Utilization of digital technology can increase the accuracy of program targets For
5 example: KPCPEN One Data System, Care to Protect, Telemedicine Services, PKL-WN
Applications, etc.
6 The pandemic creates innovation i.e. manufacture of Red and White Vaccines.

Post Pandemic: Covid-19 Pandemic Handling
1. PPKM was officially revoked on Friday, 30 December 2022;

2. During the transition:
• The COVID-19 Task Force will continue to run until the community becomes
resilient (for 6 months and then evaluated);
• The second booster vaccination runs from 12 January 2023, free of charge.
3. Handling of the COVID-19 Pandemic including vaccination will be integrated with
regular health programs under the authority of the Ministry of Health and related
institutions.
4. Early Warning Indicators dan Early Warning System Pandemi COVID-19 are still
monitored and managed by the Ministry of Health, just like other health indicators.
5. Crisis Management Protocol Pandemic COVID-19 can be re-activated if conditions
return to a crisis period based on an assessment and recommendation from the
Ministry of Health.
The Direction of the National Economic Recovery Policy for 2023:

• As the Covid-19 Pandemic is under control and the Activity Restriction (PPKM) ends, implementation of Health
Management, Social Protection, and Economic Recovery Programs in 2023 will be according to the duties of
each Ministry/Agency.
• The government will strengthen the Adaptive Social Protection Program through various database improvements
and program enhancements to anticipate the impact of economic turmoil and potential disasters that will occur in the
future.
The Improvement Trend Continues
GDP Growth (%YoY) S&P Global Indonesia Total Investment CCI & Retail Sales
60 Manufacturing PMI (DDI+FDI) Rp Trillion
10 150 20,0
5,03 Expansion >50 52,7 350 328,9
5 55 130 10,0
300 0,0
50 110
0 250
-10,0
45 200
-5 90 -20,0
40 150
-10 100 70 -30,0
35
Aug-20
Aug-21
Aug-22
Oct-20
Oct-21
Oct-22
Apr-20
Apr-21
Apr-22
Apr-23
Jan-20
Jan-21
Jan-22
Jan-23
20
21
22
20
20
Feb- 21
21
Feb- 22
22
23
Jun-20
Jun-21
Jun-22
Jul-20
Jul-21
Jul-22
-20
-21
-22
Dec-20
Dec-21
Dec-22
Mar-20
Mar-21
Mar-22
Mar-23
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Contraction <50 50
Nov-
Nov-
Nov-
Feb-
Sep-
Sep-
Sep-
Feb-
May
May
May
2019 2020 2021 2022 2023 30 0
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Consumer Confidence Index (CCI)
Total GDP 25
Retail Sales-g (rhs)
Nov-1 9
Nov-2 0
Nov-2 1
Nov-2 2
Household Consumption
May-19
May-20
May-21
May-22
Mar-19
Mar-20
Mar-21
Mar-22
Mar-23
Jan -20
Jan -21
Jan -22
Jan -23
Jul-19
Jul-20
Jul-21
Jul-22
Sep-19
Sep-20
Sep-21
Sep-22
2019 2020 2021 20222023
GFCF
Current Account Trade Balance The Indonesian Rupiah Net Capital flow
and JCI
of GDP (%) (Billion USD) 12000 7500 (Million USD)
80,00 10,00 8000
12500
2,00 0,89 60,00 8,00 13000
7000 6000
4000
1,00 40,00 6,00 13500 6500 2000
14000 0
0,00 20,00 4,00 6000
-2000
14500
-1,00 0,00 2,00 15000 5500 -4000
-6000
-20,00 0,00 15500
-2,00 5000 -8000
-40,00 -2,00 16000 4500
-10000
-3,00 16500 -12000
-60,00 -4,00 1/1/2021 1/1/2022 1/1/2023
-4,00 17000 4000
1 5 9 1 5 9 1 5 9 1 5 9 1
1/16/202 0
5/16/202 0
9/16/202 0
1/16/202 1
5/16/202 1
9/16/202 1
1/16/202 2
5/16/202 2
9/16/202 2
1/16/202 3
5/16/202 3
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1
2019 2020 2021 2022 2023
2018 2019 2020 2021 20222023 Balance (Billion USD)
Export-g (%YoY)-rhs Equity Flow (ytd)
Import-g (%YoY)-rhs
IDR/U SD JCI-rhs Bond Flow (ytd)
Total
Sources: CEIC, BI, BPS, Bloomberg (as of 26 May 2023) 9
Pre - Employment Card to Boost Working Skill Program
Achievements Outcome
A. Improved Working Skills and Entrepreneurship Opportunity
The training to improve skills and competence
>45.1 mio
Verified applicant registered 87,2%
on the Kartu Prakerja database
56% 39,8%
Who previously unemployed are now getting jobs
16.425.420 Total Beneficiaries (Batch 1-47) B. Acceleration of Financial Inclusion

47% Beneficiaries who previously did not have access
services are now have bank account or e-wallet.
to financial
Rp37,96 trillion Incentive fund disbursement
C. Improved Purchasing Power and SMES

% beneficiaries used the cash incentives for
38 Province 514 District/City
95% 74% 70% 61% 64% 55%
Staple Food Electricity/Water Business Capital Mobile Data Fuel Transportation
Statistical Demography
Desa Bachelor 11%
18… 27% Kota
64%
Residency
Education
36% Diploma 4%
26… 34%
Age
High-School 49%
36… 21% “Kartu Prakerja is the most extensive
Middle-… 17%
46… 13% G2P (Goverment to Person) Program”
Elementary… 19%
>55 5%
Source: Project Management Officer
Source: Coordinating Ministry for Economic Affairs Program Kartu Prakerja, Dec 2022 10
From Semi-Social Assistance (Bansos) Scheme To Normal Scheme
In 2023, the Government will implement a normal scheme that focuses more on improving skills, through offline, online or mixed
training. Thus, the Pre-Employment Card is no longer semi-social assistance
SEMI-BANSOS NORMAL
SCHEME SCHEME*
The membership
requirements are the TRAINING MODE TRAINING MODE
same as before ONLINE ONLINE — MIX — OFFLINE
HOWEVER,
TRAINING BUDGET LIMIT TRAINING BUDGET LIMIT
SOCIAL ASSISTANCE MAX. Rp 1.000.000 MAX. 3.500.000
RECIPIENTS/
GOVERNMENT ASSISTANCE POST TRAINING INCENTIVES & SURVEY POST TRAINING INCENTIVES & SURVEY
ALLOWED 4 x Rp 600.000 & 3 x Rp 1 x Rp 600.000 & 2 x Rp
50.000 50.000
*AMOUNT OF AID AND TRAINING MODES HAVE BEEN DETERMINED IN KEPMENKO 251/2022 DATED * TOTAL TARGET RECIPIENTS: 1,000,000 PEOPLE
DECEMBER 2, 2022 • The allocated budget for FY 2023 is 2.67 T for 595
thousand beneficiaries
• So that an additional budget of 1.7 T is needed for
Regarding preparations for the implementation of the Normal Scheme, MPPKP has also coordinated with the 405 thousand beneficiaries
relevant Ministries/Institutions to involve higher education institutions and K/L Training Institutions that have
the potential to join the Pre-Employment Card Program
DIGITIZATION OF MSMEs: MSMEs LEVEL UP
STRENGTHENING THE MSME ECOSYSTEM STRENGTHENING E-COMMERCE ECOSYSTEMS

100 84,8
80
84,8
60 %
35,2 34,4 30,4
40 MSMEs have
20 8,1 7,1 returned to normal Sector Business Climate
Permissions
0 operations e-commerce
Berjalan normal Berjalan terbatas Belum beroperasi
compared to 2020
2020 maret-april 2021 (Survey of 505
(Source: Mandiri Institute Survey, June 2021) MSMEs) Tax Sertification Payment Logistic
During the pandemic, MSMEs used various marketplace

networks to sell their products, 40% of MSMEs used Market Financing Personal data Control
social media, and the rest used instant messaging Access DIGITIZATION Protection informatics
(38%), e-commerce (13%), and ride-hailing (5%). MSME
(Source: Mandiri Institute, 30 June 2021)
System Operation and
Training Accompaniment
Electronic Transaction
MSME Market Access and Empowerment Support
Raw Material
Digital Infrastructure
Access
Source: Kominfo, 2021.
8 out of 10 Get help during the pandemic

UMKM get to Experiencing an increase in
know finance/ transactions per day
banking products Get to know digital finance
Source: Coordinating Ministry for Economic Affairs Source: OVO and CORE Indonesia Survey (2021) 12
KUR Program to Increase Access to Finance for
Entrepreneurs And SMEs
The 2023 KUR ceiling is IDR 450 trillion or adjusted to the adequacy of the KUR subsidy budget in the 2023 State Budget,
accompanied by the addition of new debtor targets and KUR distribution graduation target debtors
KUR Policy Returns to KUR Policy to Expand Distribution
KUR Policy Encouraging
Before the COVID-19 and Encourage an Increase in KUR
Graduation of KUR Debtors
Pandemic Debtors
1. KUR interest rate returns to 6% • Reduction the Super Micro KUR interest • Confirmation of the implementation of KUR without
without additional KUR interest rate from 6% to 3% additional collateral for the KUR ceiling up to. IDR 100
subsidy/margin of 3% million by imposing non-payment sanctions and/or
• Maximum limit for Micro KUR access:
returning interest subsidies/margin subsidies.
2. The target for KUR distribution in Ø Non-production sectors and non- • Affirmation of the requirements for prospective KUR
the production sector is again set agricultural production sectors, Recipients to never receive commercial
at 60%. plantations, livestock and fisheries: a investment/working capital loans (except consumer
3. The total return of the maximum of 2 (two) times Micro KUR loans which are excluded).
accumulated Small KUR ceiling is a access
• Changes in provisions related to Employment BPJS,
maximum of IDR 500 million Ø Agricultural, plantation, livestock and Small KUR Recipients and Special KUR with a ceiling
4. Extending the KUR restructuring fisheries production sectors: a of more than IDR 100 million have changed the
policy until March 31, 2024 maximum of 4 (four) Micro KUR access phrase from before it can become mandatory to
(according to POJK) become BPJS Employment participants.
• Micro KUR and Small KUR interest
rates/margins increase in stages (KUR • Adding subrogation cooperation to the PKS online
interest subsidies slide/decrease in KUR guarantee system.
stages) • The addition of new debtor targets and KUR
distribution graduation target debtors, with a 2023
KUR ceiling of IDR 450 trillion or a ceiling according to
the adequacy of the 2023 State Budget.
• Additional GWM incentives for KUR distribution

Fiscal Incentives Policy to Boost the Economy
The government facilitates fiscal incentives to create a conducive investment climate, especially for industry players. Through increased investment, it is
hoped that it can strengthen the domestic industrial structure
TAX HOLIDAY & INVESTMENT

TAX ALLOWANCE SUPER DEDUCTION TAX
MINI TAX HOLIDAY ALLOWANCE
• The criteria are new investment, • To encourage investment in

taxpayers including pioneer
• To increase direct investment Super Deduction Vocational
labor-intensive industries,
industries, and income received from
activities for certain business • Engaging industry in vocational activities
support programs for job
the main business activities carried fields and / or in certain areas. to provide knowledge and encourage the
creation and absorption of
out. • The facilities include a reduction Indonesian workers.
transfer of knowledge
in net income of 30% of the total • A maximum reduction of 200% gross
• There are 18 eligible pioneer • Deduction from net income, of income from costs in the context of
industries that consist of 169 KBLI. investment for six years, 60% of the amount invested in providing work practice, apprenticeship,
Pioneer industries are defined as accelerated depreciation and tangible fixed assets, including and / or learning activities.
industries possessing broad linkages, amortization, imposition of land, that are used for the • As per September 2022, there are 186
giving added value and high income tax on dividends paid to taxpayer’s main business agreement for vocational activities (ytd)
externality, introducing new foreign tax subjects of 10% or activities. The deduction is
technology, as well as possessing lower and compensation for spread over six years (10% R & D Super Deduction
strategic value for the national • Increase the role of industry in fostering
losses of up to 10 years. annually), starting from the
innovation and the use of the latest
economy. • The criteria are having a high fiscal year the commercial technology in the production process
• Income tax reduction are 100% & investment value or for export, a production commences • Maximum gross income deduction of
50% (mini tax holiday) during the large absorption of labor; or have • There are 45 labor-intensive 300% over R&D costs carried out in
next 2 (two) years subsequent to the a high local content. industrial sectors and employ Indonesia
end of the CIT reduction periods an average of 300 workers in 1 • As per December 2022, there are 18
above, the taxpayers are eligible for tax year. proposal for research and development
half of the CIT reduction percentages activities (ytd), with estimated RnD cost up
• Total Investment: Rp14.3 Trillion
to Rp110.4 billions
• Tax Payer: 16 Tax Payer
• Approval: 19 Minister of Finance Decree • Total Investment: Rp368,3 Billion
As of December 2022 year to date):
• Source: OSS December 2022 • Investment: 2 activities
Total Investment: Rp146.5 Trillion
• Tax payer: 2 tax payers
Tax Payer: 20 Tax Payer
• Source: OSS December 2022
Location: 10 provinces
Origin of investment: domestic and 6 countries Source: Coordinating Ministry for Economic Affairs 15
Section 2
Accelerated Reforms Agenda Supported by
Institutional Improvement and Progressive
Infrastructure Development
A Well Maintained of Indonesia’s Sovereign Credit Rating
in The Midst of Economic Recovery
BBB / Stable
December 2022, Rating Affirmed at BBB/Stable
“Indonesia's rating balances a favourable medium-term

growth outlook and low government debt/GDP ratio against
weak government revenue and lagging structural features,
such as governance indicators, compared with 'BBB'
category peers.”
BBB / Stable
April 2022, Outlook Revised To Stable; BBB Ratings Affirmed

“The stable outlook reflects our expectation that Indonesia's
economic recovery will continue over the next two years,
supporting the government's continued fiscal consolidation
efforts. We expect the pace of the recovery to accelerate
further this year.”
Baa2 / Stable
March 2023, Rating Affirmed at Baa2/Stable

“”Indonesia’s credit profile is supported by its large
economy, low fiscal deficits and modest debt burden.,
balanced against low revenue mobilization, reliance on
external funding and some economic concentration that
leaves the economy vulnerable to commodity cycles.”
BBB+ / Stable BBB+ / Stable

July 2022, Rating Affirmed at BBB+/Stable
July 2022, Rating Affirmed at BBB+/Stable
“In R&I view, Indonesia's economy that plunged in 2020 will likely return to a pre-
coronavirus growth level in one to two years. The government's structural reform efforts are “The ratings mainly reflect the country’s solid domestic demand-led economic growth
also expected to boost growth potential in the medium to long term. Despite the pressure potential, restrained public debt and resilience to external shocks supported by
on the fiscal side caused by policy responses, the government debt ratio remains relatively accumulation of foreign exchange reserves. JCR holds that the debt will gradually
low. The economic resilience to external shocks is maintained thanks to flexible policy decrease as the fiscal balance improves mainly increased revenue from economic
responses by the government and the central bank and ample foreign reserves”. growth and higher commodity prices ".
17
Indonesia Gold Vision 2045: Become A Sovereign,
Advanced And Sustainable Country
INDONESIA 5 GOLD VISION 8 17 45 MAIN

GOLD VISION TARGETS OF DEVELOPMENT DEVELOPMENT INDICATORS OF
2025-2045 INDONESIA MISSIONS DIRECTIONS DEVELOPMENT
1. Income per capita is the same as developed countries
2. Poverty goes to 0% and inequality decreases
3. Leadership positions and international influence increased TRANSFORMATION
4. HR competitiveness increases
5. GHG emission intensity towards NZE 1. Social
2. Economy
Development Phase 3. Governance
First Phase FOUNDATION OF TRANSFORMATION

Strengthening the foundation of
(2025-2029) transformation
4. Legal Supremacy, Stability, & Diplomatic Strength
With the establishment of a strong
Second Phase
foundation, Indonesia has accelerated
5. Socio-Cultural and Ecological Resilience
(2030-2034)
its economy
TRANSFORMATION IMPLEMENTATION FRAMEWORK
Third Phase Indonesia started steps to expand
(2035-2039) globally 6. Equal and Quality Territorial Development
7. Quality and Environmentally Friendly Facilities and Infrastructure
Fourth Phase Indonesia succeeded in realizing 8. Development Sustainability
(2040-2045) Indonesia Gold 2045
Source: Preliminary Draft RPJPN 2025-2045, May 19 2023 18

Indonesia's Grand Strategy in Encouraging Sustainable
Economic Growth
q Indonesia's economic fundamentals are solid and have been able to return to pre-pandemic levels, in line with increased mobility and leading
indicators that show bright prospects.
q Furthermore, the government will continue to encourage accelerated growth with various strategies to achieve sustainable growth.
Current Conditions:
Grand Strategy
Solid Economic Fundamentals
q Government and Society Prepare to Live
With COVID-19
q Indonesia's economy is
growing strong and has q Fiscal Policy as Shock-Absorber
reached pre-pandemic
Goal
q Price Stabilisation
levels
q Population mobility is q Omnibus Law on the Job Creation Act,
including IKN development
starting to increase, in line
with the controlled Covid- q Downstreaming and industrialization of
19 cases
natural resources Achieving
q Optimization of clean energy sources and Sustainable
q Leading indicators indicate a green economy
Economic
convincing economic q Legal, social, political and economic Development
outlook protection for the people
q Resilient external sector
q MSME’S LEVEL UP
19
TARGETS OF ECONOMIC TRANSFORMATION FOR
INDONESIA GOLD 2045
Economic transformation aims to bring Indonesia out of the middle-income trap and into a high-income country. For this reason, the
Indonesian economy must grow by an average of 6-7% in the next 20 years, high economic growth that is inclusive and sustainable
Economic Transformation
Indonesia has been 22
trapped in MIT for 30 years
years (1993-2022 1. Science and Technology, Innovation and
Economic Productivity
Optimistic Scenario
2. Green Economy Implementation
Transformative Scenario 3. Digital Transformation
Baseline 4. Domestic and Global Economic Integration
5. Cities as Centers of Economic Growth
First Phase Downstream natural resources and

(2025-2029) strengthening innovation research and labor
productivity
Second Phase Massive increase in productivity and expansion
(2030-2034) of sources of economic growth
Third Phase Economic power house that is integrated with

Years Escape form global and domestic chain networks, as well as
Scenario Average Growth (2035-2039)
MIT strong exports
Transformative 6% 2041 Fourth Phase High income country
Optimistic 7% 2038 (2040-2045)
Source: Preliminary Draft RPJPN 2025-2045, May 19 2023 20

Structural Reform Towards “Indonesia Maju 2045" and
Out of the Middle-Income Trap
2024 will be the fifth year of implementation of the 2020-2024 RPJMN. To achieve the 2045 vision, economic transformation is carried
out supported by downstream by utilizing 1) Human Resources Development, 2) Infrastructure Development, 3) Regulatory
Simplification, and 4) Bureaucratic Reform. And 2024 is encouraged for a High Recovery Acceleration.
RPJMN 2020-2024 23.199

be the starting point 2036
achievement of the Vision in 2045 EXIT MIDDLE INCOME TRAP
GDP per Capita
(USD)
16.877
2019/2020
Become Upper
Middle Income 12.233
Country
8.804
6.305
4.546
3.377
5,2% 6,0% 6,2% 5,9% 5,6% 5,4% Average Growth
2015 2020 2025 2030 2035 2040 2045
PRE COVID POST

Indonesian Digital Economy Development Framework
Concept (2021-2030)
VISION
Become a Digital Economy Powerhouse to Realize
Inclusive, Connected and Sustainable Economic Growth
The contribution of POTENTIAL ACHIEVEMENTS 2030
the Internet Economy The e-Commerce 35 Million MSMEs 250 million 2 times the worker
reaches IDR 2,711 market reaches IDR digitized digital literacy productivity ratio vs. cost
trillion 1,815 trillion GOAL
Increase Efficiency & Creating Encouraging Creating Achieving Digital
Productivity Jobs Innovation Inclusivity Economy
STRATEGY Sovereignty
(Accelerate) Accelerating (Create) Creating diverse and (Encourage) Encouraging cross-

the digitization of the equitable digital economic sector/stakeholder coordination
economic sector opportunities
3 MAIN PILLAR 4 5 6
1 2
Human Research, innovation & Data Governance Funding &
Infrastructure Policies/Regulations
Resources Business Development & Cybersecurity Investment
Digital Economy Development Program
Agriculture & tourism and
PRIORITY Industry 4.0 Trade Education Finance Health MSME
Fisheries creative economy

The Framework of Job Creation Law
New Business New Job

COMPANY Creation Creation
INVESTMENT
Business Welfare
Development Creation
PRODUCTION
JOB CREATION
LAW
Increased
CONSUMPTION Increased
Purchasing
Power Income
HOUSEHOLD

Job Creation Law As A Tool For Long-term Structural Reform
PROGRESS OF THE JOB CREATION LAW Clusters in the Job Creation Law
With the Omnibus Law method, 79 laws were revised 1. Improving the Investment Ecosystem and Business Activities
and simplified to become the Job Creation Law (Law 2. Employment
3. Ease, Protection, and Empowerment of Cooperatives and MSME
Number 11 2020) was promulgated 4. Ease of Business
on November 2, 2020 5. Research and Innovation Support
6. Land Procurement
7. Economic Zone
8. Central Government Investment and Acceleration of National
Derivative regulations of 54 Government Strategic
Regulations/Presidential Regulations 9. Projects Implementation of Government Administration
10. Imposition of Sanctions
a) Revising Law 12/2011 to accommodate the Omnibus Law
The decision of the Constitutional Court on method
November 25, 2021 b) Change the Job Creation Law based on the revision of Law
12/2011 within two years
c) Review the substances that objection to the community
On June 16, 2022, Law No. 13 of 2022 concerning The subject matter in the revision includes:
Amendments to Law No. 12 of 2011 concerning the a) Omnibus method;
Establishment of Legislation b) Strengthen community involvement and meaningful participation;
c) Regulatory digitalization
d) Improve the technical error of writing in the draft law either
that has been agreed upon or after the President receives the
• The government prepares improvements to the job bill
creation law following the decision of the Constitutional
Court, which involves the technical formation of the job • The Job Creation Law and its implementing regulations are still in effect
creation law but does not change its substance. and no material on the Law has been annulled by the Constitutional Court.
• Preparation of academic manuscripts and draft law • Thus, the implementation of the Job Creation Law, which concerns, among
manuscripts others, Business Licensing and OSS, Employment including provincial and
• It has expected to be completed in 2022. district/city minimum wages, and facilities for MSMEs, still applies.
The Government Focuses On Regulations And Procedures
For Ease of Doing Business
Improvement of regulations in the context of structural reforms to the Job Creation Law and its
derivative regulations can provide legal certainty to business actors.
Streamlining Administrative Procedures and a Positive Investment Climate

FDI Realization (IDR Tn)
Impact on ease of doing
Ease of Doing Business Latest update business 644,2
Policy
PERPPU 2 of 2022 454,0

Law No. 11 of Providing legal 423,1 412,8
2020 About Job concerning Job certainty to
Creation Creation has business actors
been issued
2019 2020 2021 2022
Improving risk-based
Unemployment Rate (%)
Government Revision of the licensing procedures 7,07

Legal Draft and (NSPK) and
Regulation No 5
Appendix I/II harmonization with 5,86
of 2021
other PPs
Assistance in
conformity
Better and
OSS RBA evaluation
smoother Business
Feb'15
Feb-16
Feb-17
Feb-18
Feb-19
Feb-20
Feb-21
Feb-22
System between
Licensing Services
Regulation and
Source: Coordinating Ministry for Economic Affairs System 25
Perppu No. 2 of 2022 Concerning Job Creation Law Is An Improvement
of The Previous Regulation
Constitutional Court Follow-up Emergency Regulation
Decision 1. Setting the omnibus method in the It is urgently needed to anticipate
q The Constitutional Court (MK) Law on the Formation of Legislation global and domestic conditions.
stated that the Job Creation (Law Number 13 of 2022)
law was conditionally 2. Improvements to the Job Creation PERPPU NO. 2 OF 2022
unconstitutional. Law: (30 December 2022)
q The Job Creation law is still • Use of the omnibus method
valid and asked the The contents of the Job Creation
• Meaningful increase in Perppu are generally the same as
government to complete the participation
revision within two years. the contents of the Job Creation
• Substantial study results: Law, however there are some major
employment, land, environment improvement to the content
and base
Several Major Improvement are Related To Employment Regulation, Halal Certification, and Water Resource Management
Employment Regulation Halal Product Assurance (Halal Management of Water

Certification) Resources
1. Refinement of the setting of 1. Development of the BPJPH 1. Implementation of water sources in
Regency/City Minimum Wage. organization in the regions as the form of diversion of river channels
2. Changes to the formula for needed. based on approval by the
calculating the Minimum Wage 2. The Halal Certificate is valid since Government
which takes into account certain issuance and remains valid as long 2. Criminal sanctions for intentionally
variables of Economic Growth, as there is no change in the violating water source activities
Inflation and Indices composition of the ingredients include diverting the river channel
and/or PPH. without approval.
3. Halal certification for MSEs through 3. Imposition of administrative sanctions
a halal statement is free of charge. in the form of administrative fines.
26
The Job Creation Law Encourages Employment and Facilitates
New Business Opening While Recovering the Post-Pandemic
Economy
Has simplified into
With the Omnibus Law Job 186 Article
method, 79 Indonesian Creation
Laws were revised at dan 15 chapter
Law
once with only one Job
Creation Law which
regulates 16 sectors
Investment Ecosystem
11 Cluster
and Business Activities Research and Government Investment &
Innovation National Strategic Project
Business Licensing Land Acquisition (PSN)
Public Administration
Employment Economic Zones
Imposition of Sanctions
SME and Cooperatives Ease of Doing Business
*The UUCK has been in effect since its promulgation on November 2, 2020. The Constitutional Court Decision
No. 91/PUU XVIII/2020 dated November 25, 2021 which states that the Law of Job Creation is
unconstitutional with the condition: remains in effect operational but must be formally revised within 2 years.
The issuance of Ministerial Regulations/Regional Regulations/Regional Head Regulations which are technical
in nature, operational can still be carried out, and the OSS System will continue to run as should be .
Source: Ministry of Investment (BKPM) 27
Issuance Of Perppu No. 2 Of 2022 Concerning Employment Creation,
It Is Expected To Provide Legal Certainty To Business Players
The Job Creation Law seeks to provide legal certainty and ease with the existence of standards, particularly in
relation to business licensing requirements and processes. It is hoped that the issuance of the UUCK will
contribute to improving the investment ecosystem and ease of doing business, as well as ensuring worker
protection.
Nov 2020 Feb 2022 Agustus 2021 September 2021 November 2021 Desember 2022
~
Issued Issued Implemented Start Decision Issued
20 November 2020 2 Februari 2021 9 Agustus 2021 13 September 2021 25 November 2021 30 Desember 2022
45 Government Pemerintah Based on a letter from the Cabinet Secretary No: The Indonesian
Law No. 11 of government issued
Regulations and Indonesia B.0304/Seskab/Ekon/09/2021. The Coordinating Ministry
2010 on Job
4 Presidential meluncurkan for Economic Affairs coordinates a thorough evaluation of Government
Creation Regulation No. 2 of
Regulations OSS-RBA the regulations for implementing the OSS RBA
derived from the 2022 concerning Job
Job Creation Creation
Law Evaluation of PP 5/2021 includes:
1. Completion of KBLI in stages and without support;
2. Revision regarding the arrangement in the torso; Issuance of Job
3. Sectoral provisions; and Creation Perpu as
q Government 4. Requirements and obligations of each KBLI. an Implementation
Regulation No. 5 of of MK Decision
2021 concerning Number 91/PUU-
Implementation of The Judicial Review of the UUCK in 2021 XVIII/2020P and
Risk-Based Business will result in legal uncertainty for the provides legal
Licensing business world legal certainty to
the business world
28
Improved Ease of Doing Business
Implementation of the Job Creation Law: Opening more sectors for 100% FDI
No. 11/2021 as Amended By Law No. 6/2023
All business sectors are 100% open to foreign ownership,
Breakthrough in the legal system in Indonesia
except for a few mentioned in Presidential Decree 49/2021
concerning Investment Business Sector.
Previously, there were 515 business fields that were restricted
Job to FDI in the "Negative Investment List".
simplified Creation
Law Competitive capital requirements for FDI
There is no requirement for authorized capital for the
establishment of a business entity but there is a requirement for
a minimum paid-up capital of IDR 10 billion (~US$700,000) for
79 Laws simplified in 1 Law foreign investment (PMA).
11 cluster which regulates various sectors.
q Improve the investment climate and create legal certainty Reduction of Company Income Tax (PPh).
q Harmonize the central - regional policies Corporate Income Tax 22% for companies that are not registered or
q Minimize and prevent the practice of corruption 19% for companies listed on the Indonesia Stock Exchange (IDX).
q Simplify regulation
q Creating a vast job opportunity
q Provide protection and facility for SME’s and Before 2020 Starting 2020
Cooperatives
25% 22%
Source: Ministry of Investment 29
More Business Fields Are Open for Foreign Investment
Further provisions regarding investment requirements are regulated in a

Presidential Regulation Number 10 Year 2021 Jo. 49 Year 2021
Pres. Regulation 44/2016 Pres. Regulation 10/2021 Jo. 49/2021

“Investment Negative List” “Investment Business Fields”
The Regulation has
come into force since
4 March 2021
More (30 days after the
515 Attractive
regulation enacted)
(Article 15 Pres. Regulation
Business Fields and 10/2021)
Competitive
Business Restriction Encouraging the Development
oriented of Priority Business Fields
Mandate of Law Number 11 of 2020 concerning Job Creation Article 77 Number 2
Source: Ministry of Investment (BKPM) (Amending Law Number 25 of 2007 concerning Investment Article 12) 30
Positive Investment List:
Improving the Investment Ecosystem in Indonesia
Changes in the licensing process and expansion of business fields for investment will be a game changer in accelerating investment and opening new jobs
• In principle, all business fields are open to investment, except for

Changes in the Regulation of the business fields that are declared closed for investment or activities that
the Central Government can only carry out.
Investment Business Field • Investment value for PMA > IDR 10 billion excluding the value of land
and buildings. However, to encourage technology-based startups in the
SEZ, the investment value of PMA can be <= IDR 10 billion, excluding the
Presidential Regulation No.
Presidential Regulation No value of land and buildings
49 of 2021 (PR 49/2021),
44 of 2016 “Indonesia
which amends PR 10/2021
Negative Investment List”
“Investment Business Field” Priority Business Activities with the following criteria:
List of Business Fields Priority Business National strategic project/program Pioneer industry
Closed to Investment Activities
20 business activities Capital intensive Export oriented
246 business activities
Labour intensive Oriented in research,
Business Activities Business Activities development, and
High technology innovation activities
Allocated for or Requiring Allocated for or Requiring
Partnership with Partnership with
Cooperatives and MSMEs Cooperatives and MSMEs
145 business activities 182 business activities Fiscal Incentives Non-Fiscal Facilities
Business Activities that Business Activities that are 1. Tax Incentives: 1. Ease of obtaining business licenses
are Open with Certain Open with Certain • Tax Allowances 2. Provision of supporting infrastructure
Requirements Requirements • Tax Holidays 3. Guarantees on availability of energy
350 business activities 37 business activities • Investment Allowances 4. Guarantees on availability of materials
2. Customs incentives in the form of 5. Immigration
import duty exemption for import of 6. Manpower
machinery and goods for industrial 7. Other non-fiscal supports
Source: Coordinating Ministry for Economic Affairs
development and expansion
31
The Latest Investment Business Field Arrangements
Presidential Regulation No. 10/2021 Jo.

Presidential Regulation No. 44/2016
49/2021
“Investment Negative List”
“Investment Business Fields”
Attachment I
Business Fields Closed for Investment Priority Business Fields*
20 Business Fields 246 Business Fields
*Equipped with Tax Holiday, Tax Allowance, and
Investment Allowance
Attachment II
Business Lines Reserved for or Required Business Lines Allocated for or
for Partnerships With Cooperatives and Required for Partnerships With
SME Cooperatives and SME
145 Business Fields/KBLI 182 KBLI in 106 Business Groups
Attachment III
Business Fields Opened with Business Fields Opened with
Conditions Conditions
350 Business Fields 37 Business Fields
Investment Focus Sectors
Sector Industry Sector Industry

Downstream Natural Nickel, Copper, Coal
Resources Smelting Import Substitution Iron and Steel
Export Oriented EV Battery,

Automotive Tourism operator, tourism
Industry
Tourism supporting services, 10
new Bali
Toll road, AiIDRorts,
Infrastructure
Seaports
Furniture, Electronics,
Labour Intensive Industry
Textile, SME’s
Human Resources
Vocation, Higher
Development/ Data center, Start-ups,
Education/University Digital Economy
Education marketplace, e-commerce
1 Encouraging Collaboration of Local Entrepreneurs with Foreign Investors
BKPM Promotion
Strategy 2 Encouraging Equitable Investment outside Java
3 Providing easy incentives based on investor needs

Encouraging Investment Through Priority Sectors That Have Value Added

Encouraging Investment: Implementation Of The Job Creation Law To
Provide Legal Certainty And Investment Climate In Indonesia
Constitutional Court Decision Follow-up Emergency Regulation Promulgation of the Job

(25 Nov 2021) (Jan-Dec 2022) (30 Dec 2022) Creation Law (31 March 2023)
q The Constitutional Court stated 1. Setting the omnibus q The President has issued q The government has
that the Job Creation Law method in the Law on the a Government Regulation promulgated Law No. 6
(Law Number 11 of 2020) Formation of Legislation instead of Law Number 2 of 2023 as an
was conditionally (Law Number 13 of 2022) of 2022 concerning Job endorsement of Perpu
unconstitutional Creation (Perpu on Job No. 2 of 2022 concerning
§ The omnibus method has 2. Improvements to the Job Creation). Job Creation Becomes
not yet been regulated in Creation Law: Law.
the Law on the § Use of the omnibus q It is urgently needed to
Establishment of Legislation method anticipate global and q Perpu on Job Creation
§ Writing technical error § Meaningful increase in domestic conditions. as an attachment to Law
§ Meaningful participation is participation no. 6 Year 2023.
not maximized § Substantial study q The contents of the Job
results: employment, Creation Perppu are q All implementing
q The Job Creation law is still land, environment, generally the same as regulations for the Job
valid, and asked the and base those of the Job Creation Creation Perpu and Law
government to complete the § Correction of writing Law. However, there are Number 11 of 2020
revision within two years. technical errors. some improvements to the concerning Job
content. Creation are still valid.
• PP Number 5 of 2021 concerning the Implementation of Risk-Based Business Licensing

• PP Number 28 of 2021 concerning the Implementation of the Industrial Sector
• PP Number 29 of 2021 concerning the Implementation of the Trade Sector
• PP Number 39 of 2021 concerning the Implementation of the Field of Halal Product Assurance
Identification of Revision of • Presidential Regulation Number 32 of 2021 concerning Commodity Balances
Implementing Regulations of • Determination of Decisions and/or Actions that are Considered Legally Accepted
Law Number 6 of 2023 • PP Number 19 of 2021 concerning the Implementation of Land Acquisition for Public Interests
• Presidential Decree Number 10 of 2021 concerning the Investment Business Sector (BUPM) and Presidential Decree Number 49 of
Source: Coordinating Ministry of Economics 2021 35
Encouraging Investment: Indonesia Investment Authority (INA) To
Accelerate FDI
•PP Number 73 of 2020 concerning Initial Capital for the Indonesia
Investment Authority
Legal •PP Number 74 of 2020 concerning the Indonesia Investment
basis Authority
•PP Number 49 of 2021 concerning Tax Treatment of Transactions
Involving the Indonesia Investment Authority and/or Entities
Owned
•PP Numbers 110 and 111 of 2021 concerning the Addition of PMN
to the Capital of Investment Management Institutions
Update on Progress
q Fruitful partnerships with various institutional investors have resulted in >USD 25 billion in collective commitments. INA has deployed >USD 2 billion of capital to date
together with investor partners and will potentially deploy close to USD 3.5 billion by the end of 2023
q Investment opportunity that has been completed (closed):
• Digital infrastructure: Mitratel's IPO for a total transaction size of USD 800 million together with ADIA, ADG, GIC
• Toll Road: Investment into SMR PPTR (Waskita Karya Toll Road) for an upfront transaction size of USD 400 million together with CDPQ, ADIA, APG
• Tourism/Digital: Investment into Traveloka for a total transaction size of USD 300 million with BlackRock, Allianz, and other leading institutions
• Healthcare: Investment into a significant minority stake in Kimia Farma Apotek and subscription into Kimia Farma (KAEF IJ)’s MCB for a total transaction size of USD 150
million with Silk Road Fund
• Green Energy: Anchor investor into the IPO of Pertamina Geothermal Energy (PGEO IJ) for a total transaction size of USD 490 million with Masdar
q Current cooperation agreements secured are:
• Toll Road: Investment platform with ADIA, CDPQ, and APG for USD 3.75 billion. The Hutama Karya opportunity is expected to close in June 2023, while a Waskita Karya
opportunity is envisioned to be completed in early 2023.
• Seaports: Alliance agreement with DP World for developing container ports and supporting maritime logistics infrastructure amounting to USD 7.5 billion throughout the
concession period.
• Green Sector: USD 2 billion investment for Optimizing blended finance in ETM programs such as ADB, SMI, PLN, Global Energy Alliance with CATL Green EV Fund
• General: USD 10 billion investment framework agreement with ADG for various sectors in Indonesia
• General: USD 3 billion investment framework agreement with SRF for various sectors in Indonesia
Source: Coordinating Ministry of Economics Source: INA, as of May 30, 2023

36
Investment Policy Direction 2020 -2024:
Improving Investment Quality To Promote Inclusive and Sustainable Economic Growth
Sumber: Strategic Planning of Ministry of Investment/ BKPM (Renstra) 2020 – 2024 37

Investment Realization Target 2020 to 2024
With the direction of President Jokowi to improve the economic

growth and encourage investment quality, the investment realization
target is increased in 2021 to Rp900T, 2022 to Rp1.200 T, and
2023 to Rp1.400 T
Strategic Goals and Key Performance
No Number 2020 2021 2022 2023 2024
Index BKPM 2020-2024
1 Investment Realization Target Rp Trilion 817,2 858,5 968,4 1.099,8 1.239,3
2 Investment Realization in Secondary
Sector Rp Trilion 227,2 268,7 352,5 483,9 646,1
3 Quality Investment Distribution (outside

Java) % 48,3% 49,0% 49,7% 50,6% 51,7%
4 Investment Contribution from DDI

including SME’s % 48,8% 49,7% 50,3% 51,9% 53,1%
Total Investment 47,3% Adjustment of the Total Investment Target for

Investment Realization
Realization Year 2020 to 2024 to Rp. 5.967,2 T
Target Year 2020 to 2024
2015 to 2019 +19,75% (from initial target)
Rp. 3,381.9 T Rp. 4,983.2 T
+76,45% (from total previous realization)

Indonesia's strategy prioritizes investment with multiplier effects:
downstream, green economy, digitization, and HR development
6 Main Strategies for Economic Transformation:
Green and low Increasing Relocation of Digital Domestic

carbon economic the nation's transformatio economic HR
economy productivity capital n integration development
Green and Low Carbon Economy is one of the main strategies set by President Joko Widodo to realize medium-long term
economic transformation, which is achieved through the Low Carbon Development framework.
Priority Investment Sector
Value Added
Labor Intensive Export Oriented New Renewable Infrastructure Digital Economy Industry
Industry Industry Energy (Downstream)

Risk-Based Licensing Approach

Risk-based Business Licensing Deregulation Measures
To Encourage FDI
Ex-ante Licensing (satisfying all requirements in advance) is effectively replaced by ex-post licensing (the requirements are checked afterward), which
will be particularly advantageous for low- and medium-risk businesses.
Starting a Business Doing Business

The Government implemented OSS-RBA on August 9, 2021, RISK-BASED TARGETING – Optimizing Effectiveness and Cost of
based on Regulation 5 of 2021. Monitoring:
High Risk • Resource and time limitations
Low Risk Medium Risk
• Focus on critical hazards that are more likely to arise
NIB Issued = 4.445.492 • Consider random inspections because blanket inspections are
Period August 4, 2021 – 27 June, 2023 not appropriate, resulting in excessively costly (for countries
Based on Business Based on Based on Business and businesses)
Actor: Investment Type: Scale: INSPECTION:
• Business Entity • FDI = 16.843 • Micro = • Based on the risk
= 575.384 4.235.563 • Inspection is carried out to ensure the implementation of
• DDI = • Small = 153.833
• Individual = 4.428.649 operational and commercial activities according to business
• Medium = 19.671
3.870.108 standards
• Large = 36.425
• exception in the implementation of supervision for Micro and
Action Plans Small Enterprises
Short - Medium-term
• implementation of inspections can be carried out by certified
• Accelerate the reduction of Ex Ante licenses toward Ex Post compliance professionals (third parties).
(Risk-Based Approach)
• Towards technical regulations for risk management – Third Party System
• Establish OSS as a national portal for business licenses with legal
The Progress of Development Monitoring/Inspection Subsystem
security Of the 44 modules in the monitoring (inspection) subsystem:
• 36 modules have been completed/embedded in the OSS RBA (go-live)
Long-term
• 8 modules are still in the process of User Acceptance Testing (UAT)
Speed up better development approach (e.g., climate change, etc.)
Source: Coordinating Ministry of Economics
41
Implementation of Risk-Based Business Licensing
Government Regulation Number 5 of 2021
To Start and Carry Out Business

Activity
Basic Requirement for Risk Based Business Licensing Business Licensing to Support
Business Licensing (KBLI) Business Activity (PB UMKU)
Prior to Law After Law • Risk-Based Business Licensing based - Previously (OSS 1.1) was known as
on KBLI regulated in PP 5/2021. Commercial/Operational License
11/2020 11/2020 - PB UMKU services are carried out entirely
• The fulfillment of provisions,
Suitability of Space requirements and obligations is based through the OSS system
Location Permit Utilization Activities on the Sector PP, Presidential - PB UMKU is in the process of finalizing the
(KKPR) Regulation, and Permen/Perban* system with Line Ministries and there is an
derivatives of PP 5/2021. agreement:
Environmental Environmental
• if the nomenclature and services have
Permit approval
been accommodated in the line ministries
Building Permit
system, first the system integration will be
(IMB) and Building Building Approval
carried out,
Function Certificate (PBG) and SLF
• however, if it has not been
(SLF)
accommodated by the line ministries
system, the priority is immediately
planted in the OSS system.
*) Various requirements are regulated in 22 Candy/Bandages that must be accommodated and planted in the OSS system

Risk Based OSS System: Users and Features
OSS System is Mandatory Features in OSS
Business/ Regional Information

Line Ministries SEZ KPBPB
Investor Government
Business License and
SME 18 Line Ministries 34 Province 19 SEZ 5 KPBPB Facility
Non SME 416 Regency Monitoring
98 City
Source: Ministry of Investment (BKPM)

43
Architecture of OSS System

Ease of Business Licensing and Investment Facility
through the OSS System

Tax Incentives and Reform
Investment Facilities through OSS System
Lower 25% Tax Holiday and Mini Tax Holiday

Corporate income tax exemption of 50-100% for 5-20 years
Tax Rate for the <2020 for investments in pioneer industries.
Corporate
Income Tax Tax Allowance
Income deduction before corporate income tax of 30%-TA
(or 60%-IA for labor-intensive industries) of the investment
22% value for 6 years for investments in certain business fields

and/or areas.
Law No. 2/2020, PERPPU 1/2020, 2020-2021

PP 30/2020
Import Duty Facility
Import duty exemption incentives for imports of machinery
as well as goods and materials for industry and service
industries.
20%
Other improvements:
1. E-filing for CIT, VAT, worker Investment Facility in SEZ
income tax (payroll) Tax Holiday for Main Activities, Tax Allowance for Other
2. Faster VAT Restitution Activities, for investors investing in Special Economic Zones.
2022 dst * Import Duty, Excise and Tax facilities related to Import do not go
through OSS.

Investment Realization in Jan-Mar 2023
Indonesia Investment Trend

2021-2023 YOY Q1 Investment Realization
Jan – March 2023
350 328,9
Rp 328,9 T
300 282,4
23,5 %
250
219,7
YOY
Amount in Rupiah
200 177 Labor Absorption Investment Target 2022

150
111,7
147,2
151,9
384.892 Rp 1400 T
135,2 people
100
108
50
0 FDI DDI Outside Java

2021 2022 2023 Rp 177,0 T Rp 151, 9 T Java Rp 156,0 T
(53,8%) (46,2%) Rp 172,9 T (47,4%)
(52,6%)
FDI DDI Total Realization

Investment Realization Trend in Java and Outside Java
2019 2020 2021 2022

Total: Rp809,6 T Total: Rp826,3 T Total: Rp901 T Total: Rp1.207,2 T
Labor Absorb: 1.033.835 Labor Absorb: 1.156.361 Labor Absorb: 1.207.893 Labor Absorb: 1.305.0001
Secondary Sector: Rp216 T Secondary Sector: Rp272,9 T Secondary Sector: Rp 325.4 T Secondary Sector: Rp497,7 T
DDI: Rp386,5 T (47,74%) DDI: Rp413,5 T (50,04%) DDI: Rp447 T (49,62%) DDI: Rp552,8 T (45,79%)
FDI: Rp423,1 T (52,26%) FDI: Rp412,8 T (49,96%) FDI: Rp454 T(50,38%) FDI: Rp654,4 T (54,21%)
Outside Outside Java Outside Java

Outside Java Java Rp468,2 T (52,0%)
Rp 636,3 T (52,7%)
Rp375,0 T (46,3%) Rp417,5 T (50,5%)
Java Java Java

Java Rp408,8 T (49,5 %) Rp432.8 T (48,0%) Rp570,9 T (47,3%)
Rp434,6 T (53,7 %)
Since the 3rd quarter of 2020, investment realization outside Java has always been greater than investment realization in Java. Thi
massive infrastructure development outside Java during the 1st period of President Joko Widodo's administration.

Investment Realization Trend Based on Countries
2019 2020 2021 2022

Value Value Value Value
No. Country No. Country (USD-Mil) No. Country (USD-Mil) No. Country
(USD-Mil) (USD-Mil)
1 Singapura 6.509,6 1 Singapura 9.779,1 1 Singapura 9.390,1 1 Singapura 13.281,1
Hongkong, R.R.
2 Tiongkok 4.744,5 2 Tiongkok 4.842,4 2 4.609,3 2 8.226,0
RRT Tiongkok
R.R. Hongkong,
3 Jepang 4.310,9 3 Hongkong 3.535,9 3 3.160,4 3 5.514,2
Tiongkok RRT
Amerika
4 Hongkong 2.891,0 4 Jepang 2.588,0 4 Serikat 2.537,2 4 Jepang 3.564,8
Korea
5 Belanda 2.596,8 5 1.841,9 5 Jepang 2.263,2 5 Malaysia 3.343,3
Selatan
6 Malaysia Belanda Amerika

1.357,5 6 Belanda 1.422,4 6 1.761,6 6 3.026,2
Serikat
Korea Korea Korea
7 1.070,2 7 Malaysia 1.045,3 7 1.640,2 7 2.297,8
Selatan Selatan Selatan
Amerika Amerika
8 989,3 8 749,7 8 Malaysia 1.364,3 8 Belanda 1.220,2
Serikat Serikat
Britis Virgin
9 743,8 9 Taiwan 454,3 9 Bermuda 674,4 9 Bermuda 964,7
Islands
10 Australia 348,3 10 Australia 348,6 10 Swiss 599,8 10

7Inggris 628,3

Investment Realization Trend Based on Sectors
2019 2020 2021 2022

No Sector Rp (T) % No Sector Rp (T) % No Sector Rp (T) % No Sector Rp (T) %
Transportation, Transportation, Metal, Metal Metal, Metal
1. Warehouse, and 139,0 17,2% 1. Warehouse, and 144,8 17,5% Goods, Except Goods, Except
1. 117,5 13,0% 1. 171,2 14,2%
Telecommunication Telecommunication Machinery, and Machinery, and
Electricity, Electricity, Equipment Industry Equipment Industry
2. Gas and 126,0 15,6% 2. Gas and 102,0 12,3% Housing,
Water Supply Water Supply Industrial Estate, 2. Mining 136,4 11,3%
2. 117,4 13,0%
Metal, Metal and Office
Housing, Industrial
Goods, Except Building Transportation,
3. Estate, and Office 71,1 8,8% 3. 94,8 11,5%
Machinery, and Transportation, 3. Warehouse, and 134,3 11,1%
Building
Equipment Industry 3. Warehouse, and 107,4 11,9% Telecommunication
Metal, Metal Telecommunication
Housing, Industrial Housing, Industrial
Goods, Except Electricity, 4. Estate, and Office 109,4 9,1%
4. 61,6 7,6% 4. Estate, and Office 76,4 9,2%
Machinery, and 4. Gas and 81,6 9,1% Building
Building
Equipment Industry Water Supply Chemical and
5. Pharmaceutic 93,6 7,8%
5. Mining 59,5 7,4% 5. Construction 71,0 8,6% 5. Mining 81,2 9,0%
al Industry
Metal Industry In line with the policy of the President of the Republic of Indonesia on economic
Investment Realization
Growth (2019-2022)
+177,9% transformation from primary sector industry to value-added based (downstream)
industry, investment in the Basic Metal, Metal Goods, Non-Machinery and Equipment
Industry sector increased 177.9% from IDR 61.6 T to IDR 171.2 T (year 2019-2022).

National Strategic Project (PSN) list was established in 2016, and have
undergone several amendments
until recently stipulated under Coordinating Minister Regulation No.21/2022
Proposed project is evaluated by KPPIP The project has been declared

and approved through High level Limited Project
Project Complete and there are no issues
Meeting (Ratas) excluded
included in that need to be resolved
Ongoing project from the previous list and
from the
the PSN List The project no longer requires PSN
being pushed by the government PSN List
facilities
Source: Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) 51

As of now, there are 210 Projects and 12 Programs under the National
Strategic Project list
in which more than 60% of investment is expected from private sectors
11 11 Nasional Est. Total Investment

13 Kalimantan
Program Proyek
42
Proyek
Sumatera
Proyek
USD 99,33 Billion Value
USD 15,4 Billion
USD 49,01 Billion USD 383,09 Billion*
State Budget
22 13 Maluku & Papua 13%
Proyek
Sulawesi Proyek
USD 36,47 Billion

USD 21,48 Billion
20%
SOE
67% Budget
1 81 Bali & Nusa

Private
Program Proyek
Jawa 18
Proyek Tenggara
USD 126,45 Billion * Include potential tennant
USD 2,92 Billion
investment in Industrial Estate
PSN list covers 14 sectors on project level and 12 Program level
Cleanwater, Wastewater,
Road Dams Irrigation Ind. Estate Railway Plantation Energy Ports Sea Wall Airport Tourism Education Technology Housing SEZ Sugar & Palm
53 Projects 47 Projects 8 Projects 18 Projects 14 Projects 1 Project 14 Projects 15 Projects 14 Projects 6 Projects 1 Project 1 Proyek 6 Proyek 2 Proyek Program Program
Waste to
Economic Toll Road Strategic
Smelter Superhub Electricity Food Estate Energy Border Dev.
Dev. Program Access Tourism
Program Program Program Program Program Program
Program Program

Since 2016, 156 PSN have been expedited towards completion with
investment value of USD 69,48 Billion
and most of the projects have passed preparation stage
5th Amendments:
3rd Amendments: 4th Amendments: Added 13 projects + 2 programs
Added 88 projects + 5 Added 7 projects 6th Amendments
programs Added 10 Projects
2022 May 5, 2023 Information
2nd Amendments: 2021
Added 2 projects + 1 program
even distribution economy 2020 156 projects
1st Amendments: 2019 153 projects IDR 1,080.2 T
Addition of 55 projects + 1 IDR 1,040 T
industrial program aircraft 2018
104 project 128 projects Project completed
92 project (25 projects
2017 62 projects Rp590.5T IDR 716.2 T
completed in
Rp467,4T
IDR 302,1T 2022)
2016 30 projects
IDR 94.7 T
37+ projects 32+ projects 28+ projects 24+ projects 26 projects + 30 projects + 9 31 projects + 9 Partially Operated
20 project
1 program 2 programs 2 programs 5 programs 7 programs programs programs
IDR 33.3 T
75 projects Construction Phase

99 project + 78 projects
96 projects 119 projects 100 projects 95 projects 1 program 89 projects
+ 1 program Transaction Phase
4 project 4 project
6 projects 10project 46 projects 44 projects
13 projects 6 projects 4 project
36 projects + 1 aircraft 47 projects + 3 programs 3 programs
53 projects + 1
6 projects Program 66 project 3program Project in stages
industrial program
81 projects 59 projects + 1 aircraft + 4 programs setup
industrial aircraft
Program
Exit project from PSN

15project 29 projects 9 projects + 1 program 14 Projects
list
53
All National Strategic Projects have been given a special facility to ease
each of the project’s implementation
as stipulated in the Pres. Regulation No. 109 /2020
PSN Facility
Land transfer fee waiver for PSN Debottlenecking

Local content utilization
Procurement acceleration
Electronic permit licensing Government guarantee
Law settlement assistance
Spatial planning IT Monitoring system by KPPIP

Project acceleration for private
investment
Land aquisition SOE appointment
Existing New norm on Presidential Regulation No. 109/2020

Highlighted PSN Projects which aligned with recent National ESG
(Environment – Social – Governance) Agenda (1/2)
Electricity Program with focus on Renewables
Electricity Infrastructure Development (PIK)

11
(which contains projects listed in RUPTL 2021-2030);
Electricity Program
22 National Rooftop Solar Power Plant
33 Large-scale Solar Power Plant in Riau Islands
55
Highlighted PSN Projects which aligned with recent National ESG
(Environment – Social – Governance) Agenda (2/2)
EV Battery end-to-end Development Plant
The Electric Vehicle Battery Industry is one of the Government's priorities
In the next five years, the President's direction is that the government wants to focus on the
downstream industry of nickel ore, considering that Indonesia has the largest reserves in the
world.
Electric Battery Development Program as

part of new PSN List in 2022
2. PT Vale Indonesia
1. Nickel Smelter in East
Integrated Smelter
Halmahera PT Indonesia Battery
Development Project in
Corporation in East Halmahera
Pomala
A joint venture project with the Contributing the

LGES consortium to support downstreaming of electric
the supply of nickel for the battery precursor products
Loc electric vehicle battery industry up to 40,000 tons/year
#2 in Indonesia at the Batang
Loc Integrated Industrial Estate
#1
56
Highlighted PSN Projects which provide substantial benefit to private investor
- Special Economic Zones Development (KEK) on 18 Location in Indonesia
57
Highlighted PSN Projects which provide substantial benefit to private investor
– Various facilities and Modalities for SEZ investors
58
Various initiatives to boost private sector participation in Infrastructure sector
especially for National Strategic Projects
1 2 3 4
Public Private Limited Land Value Other Creative

Partnership (PPP) Concession Capture (LVC) Financing for
Scheme (LCS) Infrastructure
59
Institutional reforms to establish a conducive PPP
ecosystem…

National Strategic Project (PSN): 214 projects through
Public Private Partnership (PPP)
PPP Projects under National Strategic Projects (PSN) – incl. PSN Programs
(Updated on 2023)
210 projects under PSN Program #10

14 sectors Regional Development Program
31 Projects 49 Projects
62 Projects 6 Projects (USD 7,37 Bil) 220
(USD 16,33 Bil) PPP Projects
(USD 52,47 Bil) (USD 0,87 Bil)
72 Projects
(USD 9,12 Bil)
PSN Projects Waste to Energy Central Java Projects East Java Projects West Java Projects Total
Programs
• 30% of the projects are small scale PPP projects initiated by the
Regional Government, with investment value under USD 15
• Of these, 36 projects Million.
(53%) are Toll Road
projects.
Highlighted Projects Project Scope
Investment Value • Design – Build – Finance – Operate
Kediri Airport USD 607 Million – Maintain – Transfer (DBFOMT)
PPP Unsolicited – (incl. land acquisition) • 50 years concession
Initiated by Private • User Charge

Limited Concession Scheme Stipulation
as an asset recycling scheme for brownfield infrastructure asset

LVC Scheme implementation to ease the government burden on
infrastructure development

Government of Indonesia is exploring the potential of pilot project on LVC
to encourage Regional Government in implementing LVC Scheme
§ Coordinating Ministry of Economic Affairs in partnership with The World Bank and
DFAT- Australia has formulated Piloting Project study (Demo Project) for Land Value
Capture initiatives in 5 Cities

SDG Indonesia One is launched by PT SMI as an integrated funding
platform for private investor
Profile of PT SMI
• PT SMI is a SOEs’ non-bank financial institution with 100% of its shares owned by the
Indonesian government.
• The first financial institution in Southeast Asia accredited by Green Climate Fund (GFC
SDGs Initiative
• The platform was launched in October 2018
• The Pipeline Projects comprise public transportation sector, health care, renewable
energy, tourism and drinking water supply system
Impact toward SDGs: Increase funds availability for infrastructure projects and project
appropriateness.
Focuses on 15 out of 17 components in SDGs

which are related to infrastructure development
Source: PT SMI, 2019

Other Financing Scheme and Modality – Indonesia Investment Authority
(INA) as an Alternative Source of Economic Development Financing

Other Financing Scheme and Modality – Capital/Secondary Market that
have contribution as an alternative infrastructure financing instrument
(example)
Example on RDPT Financing
Limited Mutual Fund

(RDPT – Reksadana Penyertaan Terbatas)
Recent Progress
• Capital Market Instrument in a form
of Mutual Fund that is offered to
limited investors
• Since 2018, there are already more
than 50 products of RDPT with
approximate value of IDR 16 Trillion
and USD 125 Million
2
• Most of the sector offered is on Toll
Road Sector

Indonesia’s Special Economic Zone (SEZs)
Encourage Economic Growth, Equitable Development, And Increase Competitiveness
18 SEZs and Main Activities

Investment Commitment Investment Realization
USD 9.3 B by Tenant
(USD Billion)
2019 - 2022
USD 6.5 B
Investment Realization 2019 2020
(Tenant & Developer)
5.2*
Ratio of Foreign and

Domestic Investment 3.4
Domestic
Investment
(28%) USD 1,8
B
1.7
USD 4,7 0.8
B Foreign
Investment
(72%)
Export Performance (Sept 2022) Number of Employment

USD 324.7 Million 47,287
(USD Million) 660,6
367,4 376,9
324,7
258,7 270,1
MAIN TARGET OF SEZS 181,2
Import Substitution 34,3

Industry 4.0 Regional Services Industry Improve Trade
& Export Promotion *) up to September 2022
industrialization Acceleration Development Development Balance
2015 2016 2017 2018 2019 2020 2021 2022 USD1 = Rp15,569.05

Government Guarantee For Basic Infrastructure Development
Reflects strong commitment to national development planning
Government Guarantee Program Contingent Liabilities from Government Guarantee as of Q4 2022**
l Power (Electricity) – Full credit guarantee for PT Credit Outstanding

Central Government Guarantee for Infrastructure Guarantee
PLN’s debt payment obligation under FTP 1 No. /Investment Exposure
Programs Document
10,000MW and 35GW programs*. (billion)*
l Clean Water – Guarantee for 70% of PDAM’s debt
principal payment obligations. 1 Coal Power Plant 10,000MW Fast Track Program 5 USD 0.28
l Toll road – Full credit guarantee for PT Hutama 2 (FTP
Clean1)Water Supply Program 5 USD 0.00
Karya’s debt payment obligations for the 3 Direct Lending from International Financial 11 USD 2.58
Credit
development of Sumatra Toll Roads. Institution to SOEs
Guarantee
l Infrastructure - Full credit guarantee on SOE’s 4 Sumatra Toll Road 10 USD 2.78
borrowing from international financial institution &
5 Renewable energy, Coals & Gas Power Plant 7 USD 4.00
guarantee for PT SMI’s local infrastructure financing. 10,000 MW (FTP 2)
l Public Transportation (Light Rail Transit) – Full credit
6 Public-Private Partnerships (PPP) 7 USD 6.32
guarantee for PT Kereta Api Indonesia’s debt
payment obligations for the development of LRT
Jabodebek. 7 Regional infrastructure financing 1 USD 0.19
8 Public Transportation (Light Rail Transit) 2 USD 0.91
l Power (Electricity) – 9 Electricity Infrastructure Fast Track Program (35 6 USD 6.23
Business Guarantee for PT PLN’s
GW) Total 54 USD 23.29
Viability obligations under Power Purchase Agreements with
Guarantee IPPs (off-take and political risk) under FTP-2 10.000MW
(BVG) l From 2008 to Q3-2022**, the government has issued 94 guarantee documents with total
and 35GW programs*
value of USD41.59 billion, there were 40 guarantee documents worth USD9.20 billion have
l Infrastructure – Guarantee for Government-related been expired.
PPP l The Maximum Guarantee Limit for the period 2022-2025 is set at 6% of GDP.
entities obligations (line ministries, local governments,
Guarantee l Starting from 2008 the Government has allocated a contingent budget with respect to these
SOEs, local SOEs) under PPP contracts/agreements
guarantees. Any unused budget allocation may be transferred to a guarantee reserve fund.
This reserve fund, together with the relevant annual budget allocations, serves as reserves
l Infrastructure – Guarantee against infrastructure risks for any claim that arises from these guarantees.
Political
for National Strategic Projects (Presidential Decree
Risk
No.58/2017) which are not covered by other type of
Guarantee
guarantees
*) MOF provides both credit guarantees and BVGs for 35GW program
**) Currency conversion of IDR15,247.00/USD1 and IDR14,716.42/EUR1 (as of end September 2022)
Source: Ministry of Finance
69
The Domestic Component Level (TKDN) Implementation
“Domestic Component Level (TKDN) • Raw materials; • Labor;

TKDN Value TKDN Value • Working
represents the quantity of domestic (goods) consist of:
Direct Labor;
(services) consist of: Facility/Machinery;
components in goods, services and • Factory overhead
• General Services
combination of goods and service”
The Domestic Government WTO Rules

Component Level Procurement (Compliance)
(TKDN) q State budget • Government procurement by the Government for electronics,
q Regional budget ICTs and medical device prioritize domestic product with
q Electronics q State-owned minimum TKDN + Company Benefit Weight (BMP) > 40%.
q ICT company • Government procurement is funded by state budget, regional
q Medical Devices q Regional-owned budget, state-owned company budget, and regional-owned
company budget.
company
Non Government Non-governmental procurement is not prioritizing

Procurement product’s TKDN
The government constitutes the Increased Use of Domestic Products (P3DN) National Team
P3DN Team tasks:
a. coordinate, supervise, and evaluate the implementation of Increased Use of Domestic Products (P3DN) in
their respective environments;
b. provide a final interpretation of the dispute of the TKDN value between the producer of the goods/services
provider and the goods/services procurement team;
c. Other tasks and liaisons related to P3DN
70
Improving National Logistics System Resiliency: “Key Priorities In
Encouraging The Investment”
The government established an integrated logistics system through The National Logistic System Development Policy (SISLOGNAS). This system aims to
facilitate the flow of goods to fulfill the community’s basic needs and increase the competitiveness of national products.
Key Drivers: Logistic Action Plan
LOGISTICS PROGRAM Commodity-based improvement framework Transportation Infrastructureà
FOR 2022-2024
1 There are ±90 projects of infrastructure
1. Specify a specific commodity. development spread across Indonesia, such
2. Identify demand patterns, supply patterns and logistics costs. as toll roads, ports, airports and railways, to
Increasing national logistics 3. Set logistics efficiency targets for these commodities, for example: support the improvement of the logistics
efficiency, focusing on food and a. Lead time for domestic goods delivery; process
b. Lead time at the port for import-export goods.
health products Logistics Service Providerà Through
Government 5/2021, of the total 81 standard
Strengthen Key-Enabler
This focus aims to ensure the 2 1. Mapping and collaborating stakeholders and off-takers to implement the
classifications of business field in overall
logistics sectors, 72 (around 89%) required
availability and reliability of logistics action plans.
services to support the smooth NO LICENSE but only identification business
2. Establish a responsible organization to ensure the implementation of
number and/or standard certificate.
distribution of goods at the district action plans to support the achievement of logistics efficiency targets.
Furthermore, through Presidential Regulation
and city levels. 10 /2021, there are relaxations toward
foreign investment requirements. In the
Increasing efficiency and
3 Organizing action plans based on 6 key drivers logistics sectors, the relaxations take form in
effectiveness of export/import Preparing action plans based on the six key drivers to achieve efficiency in
flows of national leading products the allowability of foreign investment equity
national logistics and the effectiveness of export/import flows. to fully own a business.
and imports of priority industrial
raw materials. ICTà NLE is a system to provide one-stop
6. Regulations, Rules and Legislation services for the transmission of data, trade
logistics documents, and secure and reliable
This focus aims to improve the 5. Human 3. Logistics information to serve G2G, G2B, and B2B
1. Main Competitiveness transactions for domestic and international
smooth flow of exports and imports, Resource 4. ICT Service
both goods and documents, to Managemen Provider Commodity and Social trade
increase Indonesian products' t welfare Human Resource Managementà
Some programs include (a) The
competitiveness in the global market. 2. Transportation Infrastructure Sources: RPJMN 2020-2024; Presidential
establishment of the National Occupational
Regulation No.26/2012 Concerning
Blueprint of National Logistics System Map for Logistics and Supply Chain (b)
Development Legalization of the Indonesian National
Occupation Competency Standards
71
Government Continues to Support the Development of
Downstream Industries
Indonesia’s Coal Gasification Roadmap until 2045
• Establishment of 3 • Increased capacity of the • Increased capacity of the • Increased capacity of the
Gasification Plants for DME Gasification Industry to meet Gasification Industry to meet gasification industry to meet
and/or Industry the demand for DME and the demand for DME and the demand for 19.81 million
• Import of LPG has decreased Industry Industry tons of Methanol for DME
by 3,51 million tons by DME • Establishment of 2 Coal to • Establishment of 2 Coal to and Industry
substitution SNG plants in Sumatra. SNG plants in Sumatra & 1 • Increased capacity
• Infrastructure and Product • Establishment of a bio-coal plant in Kalimantan. (optimization) in each Coal
Distribution Channel for Coal briquette factory and • Establishment of the Coal Downstream Industry
Upgrading Phase-1 has been implement the use of bio-coal Liquefaction Industry to • There has been an increase
built briquettes. substitute imported gasoline in value-added of around
• Establishment of Coke Factory • Coal Upgrading industry • Establishment of REE industry 40.7 million tons of coal in
for Metallurgy started operation. and Advanced Materials, Agri- the Coal Downstream
• Increased value-added of • Increased value-added of Industry, Materials from coal. Industry.
around 19.6 million tons of around 22.7 million tons of • Increased value-added of
coal in the Coal Downstream coal in the Coal Downstream around 28.7 million tons of
Industry. Industry. coal in the Coal Downstream
Industry.
Source: Ministry of Energy and Mineral Resources

72
Encouraging The Downstream Industry To Increase
Value-added Commodities
Downstream Industry Policy Total Number and Investment Smelter 2021-2024
Strengthen and deepen Number of Smelter Total Investment
Acceleration of industrial Structure
Commodity Investment Realization
Economy Growth through R&D, product Existing Plan TOTAL
(mn $) (mn $)
innovation, brand, and
design. Nickel 11 19 30 7619.3 5508.4
Broaden Working
Bauxite 2 6 8 7138.9 2979.5
Opportunity DOWNSTERAM Iron 1 1 2 53.7 47.2
INDUSTRY Acceleration of Copper 2 2 4 4693.3 1046.9
Country foreign Industrial Mangan 1 1 2 23.9 12.5
exchange reduction with Deployment which Lead and
Import Substitution covers NKRI territorial 0 2 2 28.8 22.0
Zinc
TOTAL 17 31 48 19557.9 9616.6
Increase Local Added Increase foreign
exchange revenue
Value
through Export
Coal Development Project
Supporting Policy For Downstream The development of the Coal to DME
Industry Project aims to increase national energy
security by reducing LPG imports.
Provide Industrial Infrastructure / Development of sufficient
Industry Area or SEZ (port, energy, land, natural gas, etc.) The project in Tanjung Enim will become COAL TO DME PLAN
a Special Economic Zone (SEZ) so that
Create a conducive industrial business environment (Job COAL 6 MTPA
facilities and incentives will support it.
Creation Law, risk-based business licensing, OSS, etc.)
SYNGAS
With 6 million tons of coal annually, this
Fiscal incentive and disincentive project can produce 1.4 million DME to Gasification METHANOL
reduce LPG imports by 1 million tons
annually. DME
Technology provision, building advanced human resources,
and industrial machinery. 1,4 MTPA
Source: Coordinating Ministry for Economic Affairs Source: Ministry of Energy and Mineral Resources, 2022 Tanjung Enim 73
Promoting The Development Of Nickel-based Industries To
Become A Global Battery And EV Supplier
Government Issues Presidential Decree No. 55 of 2019 to Accelerate the Use of Battery Electric Vehicles (BEV) on the Road & Government
Regulation No. 74/2021. In order to strengthen the ecosystem of Battery-Based Electric Motorized Vehicles, the Government provides Incentive
Support in the form of Government-borne VAT
Potential: Indonesia's Nickel Reserves Are Abundant Amount of Incentive for Battery-Based Electric Motorized Vehicles
Global Nickel Reserve - TKDN > 40%

- VAT incentive of 10%, so that the VAT that must
be paid remains 1%
- TKDN > 20% - 40%

- VAT incentive of 5%, so that the VAT that must
be paid remains 6%
In Indonesia, the deepening of the electric vehicle industry

structure is carried out through the obligation to gradually
increase the domestic content level (TKDN) until 2030.
Benefits and Added Value of Nickel Downstream

Supporting Regulation
Value added process q Regulation Of The Minister Of Finance Of The Republic Of
Indonesia 38/2023
Input Output Value-added
90 to 150
Nickel Ore Battery
times
74
Economic Transformation from Primary Sector Industries
to Value-Added Industries

The Benefit of Nickel Downstreaming
PANDEMIC CONTROL IS KEY TO STRONG

Nickel Downstreaming: Indonesia as
the World Production Hub for Electric Vehicle
Investment Plan:
LG : Integrated Battery Industry US$9,8 Billion
CATL : Integrated Battery Industry US$5,2 Billion
Foxconn : Electric Battery Industry, Electric Vehicle Industry
(4wheel, 2wheel, E-Bus), and Supporting Industry
(including charging station, R&D, and training) US$8 Billion
BritishVolt: Battery and electric vehicle industry, US$2 Billion
In addition to downstreaming, investment also creates big impact: through

collaboration with SOE (MIND ID, Pertamina, PLN), national entrepreneurs,
Implementation of the Second Phase of especially MSMEs, high use of domestic component (TKDN), and large
the Electric Battery Industry absorption of local manpower.
Batang, 8 June 2022
Indonesia will become an exporter of high value-added commodities

77
Natural Resource Downstreaming As a Value-Added Commodity
Processing of Nickel to Gasification of Coal Processing natural gas into Industrialization

make the battery for into Dimethyl Ether methanol Downstreaming for Food
electric vehicles (DME) and Fertilizer Sector
Investment Collaboration Investment plan in State-owned and National The food sector is able to
with State-Owned Enterprise collaboration with State- Private Sector investment in create many new jobs and also
and National Private Sector owned And National the natural gas processing create new economic growth
in the precursor, cathode, Private Sector in Coal industry into Methanol and areas.
and electric batteries gasification industry and Fertilizer in Fakfak, West
industries its derivatives Papua and Bojonegoro, East
Java
Location: Location: Location: Location:

Central Sulawesi, North Tanjung Enim, South West Papua and Eastern Indonesia
Maluku, Central Java Sumatra East Java
Commodity: Commodity: Commodity : Commodity :
Nickel Coal Natural gas Food

78
Development Stages of the National Capital City
2020-2024 2025-2035 2035-2045 2045-onwards

Building the e ntire
Initial transfer to IKN Build ing IKN a s a Re silient Stre ng the ning re p uta tio n a s a
infrastructure and ecosystem of
Area 3cities to accelerate the “World City for All”
development of East
Kalimantan
• Critical basic • D e v elo p ing the next • Expand urban • To b e the leading city
infrastructure is p ha se of the city (e.g., development in the world in terms
completed and innovation a n d and of competitiveness
• operational (eg water, economic centre) complete connectivity • Top 10 livable cities in the
• energy, rail) for residents • C o mp lete d the tra nsfer be t we e n a n d within world
in the initial stages of cities
• Build central • Achieving net zero-
the IKN • FD I D estina tio n N o . 1 fo r
infrastructure (e.g. carbon emissions a n d
g o v ernme nt p rio rity e c o no mic sect o rs in 100% renewable
• Presidential Palace, centre Indonesia
energy at
• MPR/DPR Building) and
• D e ve l o p priority • To p 5 to p d estina tio ns in insta lle d c a p a city – the first
housing in the Main IKN economic Southeast Asia for city in the wo rld w ith >1
area global talent
sectors millio n inha b ita nts to
• Transfer of early-stage
• Implement a n • Encouraging re a ch this target
ASN (eg TNI, Polri, K/L
ASN) incentive system for sustainable utility
• Initiation of priority priority economic net wo rks b y
sectors implementing circular
• economic sectors
• Achieving the goals of e c o n o my enablers
the Sustainable • Developing a center
Development Goals for innovation a n d
(SDGs) talent development
Visioning Nusantara – New Capital City Of Indonesia
Vision New Capital City Planning Scheme

The National Capital City (IKN) is a milestone in a new
era of regional development and new economic centers
in the Regions, as well as a symbol of a big push strategy
to accelerate growth and equal distribution of the
national economy.
Recent Progress
1. The financing for land acquisition proposed by the
Minister of PUPR is IDR9.09 T until 2023, where in
2022, it was allocated through DIPA PUPR of IDR 500
M.
2. The Minister of Finance requested that the 2023
land procurement proposed by PUPR of IDR8.45 T
be accommodated through LMAN. • The IKN proposal as National Strategic Project (NSP) is
approved and included in the Regional Development
3. The DJA has approved the construction budget from Program as a Subprogram.
PUPR for 2022 of Rp. 5 trillion.
• The inclusion of IKN as NSP will refer to the Presidential
4. The need for the 2023 Construction budget is Decree No.63/2022 and the draft One Map - One
IDR23.6 T, including proposals from 5 Ministries / Planning - One
Agencies.
80
The Progress of New Capital City “Nusantara” Development
Composition of Financing for the Capital of the

The Important Role of Establishment of IKN Archipelago
• In February 2022, the Government of Indonesia enacted Law
Number 3 of 2022 concerning the State Capital. Funding for the Development of the Capital of the Archipelago (IKN)
• The relocation of the National Capital City is based on the is obtained from the State Budget, PPP, SOEs, and Private
concentration of economic activities in Jakarta and Java Island, Investment.
so it causes economic disparities between Java and Outside
Java.
Private Investment Cooperation State Budget
• Government buildings and
Palace, basic infrastructure (non-
Government worker housing
cluster), defense and security,
• Education and Health Facilities
costs of transferring Government
(Hospitals, Schools)
worker reforestation, costs of
• Commercial area (café and
operating authority
restaurant, hotel)
• Tourism area, industrial area,
innovation and technology Composition of Financing schemes
center
• Smart city 4%
GDP of USD180 Billion • Area operational
Indonesia's 3 Million New Jobs
New Economic 65% of the total estimated need for 31%
7+ Million Residents of facilities and infrastructure in 2022-
Driver IKN, Balikpapan, and 2024* will be implemented through the
Samarinda PPP scheme. 65%
Private/SOE State Budget PPP

The General Election Period Will Boost Economic Activity
“
Political Stability is one of the keys to the success of 2004 2009 2014 2019
economic achievement. Indonesia is the third-largest Number of
24 38 12 16
democracy in the world. Since 2004, the people can parties
directly elect the president and members of parliament. Presidential
candidate's 60,6% 60,8% 53,2% 55,5%
vote
NPSHIs consumption and M2 (money supply) increased during the
election period (including the campaign period) in 2014 and 2019
Elections will drive the national and regional
economy through:
GE Period GE Period
2013- 2014 2018- 2019
30 18,00 1. Increasing MSME economic activity until
25 NPSHIs Consumption the campaign period through e-mail,
16,00
printing, and various merchandise;
20 Growth M2(RHS) 2. Election logistics costs;
14,00
15 3. Improvement of facilities and
12,00 infrastructure (including infrastructure) to
10
build public image;
5 10,00 4. Regional Original Revenue (PAD) through
0 advertisement tax for the installation of
8,00 billboards, banners, video trans, etc.;
-5
6,00
-10
GE: Juli 2014 GE: April 2019
-15 4,00
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Coordinating Ministry for Economic Affairs
82
Section 3
Economic Factor:
Improved Growth Prospects
Supported by Continued Economic
Recovery Momentum
Conducive Environment
Underpinning Improved Growth Fundamentals Amid Temporary Moderation
Tax base to be
4th Most Populous Budget reform as a
broadened from
Largest Economy country in the part of larger
one reduce
in South East Asia World; 64% in economic reform
dependency on
productive age initiative
commodities
Large and Consistent Fuel subsidies
Rising Middle Stable Budget Reform significantly reduced
Manageable Prudent debt
Inflation Rate
Class and Affluent Economy and spending
management
Customers redirected to more
Reform- productive allocation
Oriented
Administration Three main sources of financing for
From commodity-based to manufacturing
investment needs: State and regional
and service sectors via infrastructure
budget, State Owned Enterprises and PPP
development
New High
From consumption-led to investment-led Continuing from 2015 policy, infrastructure
growth via a stronger manufacturing Economic Infrastructure spending will be higher than fuel subsidy
sector and more investment initiatives Structure Investments Infrastructure spending focused on basic
Policies to maintain purchasing power to infrastructure projects
stimulate domestic economy in the midst
of weakening macroeconomic conditions Fiscal and non-fiscal incentives to attract
infrastructure investment and promote PPP
84
National Economic Growth Remains Solid
Strong GDP Growth1 Against a backdrop of global economic moderation, economic growth in Indonesia
remains solid. The latest data published by BPS-Statistics Indonesia indicates 5.03%
QoQ YoY (yoy) national economic growth in the first quarter of 2023, up slightly from 5.01%
7,07
8,0 5,72 (yoy) in the previous period. Moving forward, Bank Indonesia projects solid economic
6,0 5,02 5,01 growth in 2023 with a bias towards the upper bound of the 4.5-5.3% range on the back
5,03 of improving domestic demand and persistently strong export performance.
4,0 5,05 5,01
4,21 4,20 Solid economic growth in the reporting period was supported by all GDP
3,83 3,74 4,01 4,01 3,72
2,0 3,27 3,31 3,14 3,19 3,09 3,06 3,31 components. Exports maintained high 11.68% (yoy) growth, underpinned by strong
1,55
1,06 1,81 0,92
0,0
demand in key trading partner countries. Household consumption growth improved to
(2,07) (1,73) (1,81) (1,70) (1,69) (1,74)
(2,41) (0,42)(0,96) (0,96) 0,36 4.54% (yoy) in line with increasing mobility and purchasing power, coupled with lower
-2,0 (0,36) (0,30) (0,41) (0,52)
(0,16) inflation. Government consumption expanded 3.99% (yoy), primarily driven by
(4,19)
-4,0 procurement and personnel expenditures. Meanwhile, non-building investment growth
also remained solid in line with export performance, though overall investment was
-6,0
sluggish at 2.11% (yoy) given subdued building investment growth.
-8,0 Robust economic growth was also reflected by broad-based sectoral and spatial
Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 growth. All economic sectors recorded positive growth in the first quarter of 2023,
2015 2016 2017 2018 2019 2020 2021 2022 2023 primarily underpinned by the Manufacturing Industry, Wholesale and Retail Trade as
well as Mining and Quarrying. Meanwhile, the Transportation and Storage sector,
Favourable GDP Growth Compared to Peers2 Accommodation and Food Service Activities as well as Other Services posted strong
growth on greater public mobility and a surge of inbound international travellers.
10,00 5,90
% yoy Spatially, economic growth in the first quarter of 2023 was maintained in nearly all
6,00 regions of Indonesia, led by Kalimantan, followed by Sulawesi-Maluku-Papua
5,00 (Sulampua), Java, Sumatra and Bali-Nusa Tenggara (Balinusra).
5,00
0,00 1,40
2023 Growth Projection *)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Institutions GDP growth
-5,00 1,00 2023 Budget 5.3
Bank Indonesia 4.5-5.3

-10,00
Bulgaria Colombia India Indonesia Phil ippines Consensus Forecast (June 2023) 4.8
-15,00 World Bank (GEP, June 2023) 4.9

1. Source: Central Bureau of Statistics of Indonesia (BPS), ** Including non-profit household consumption IMF (WEO, April 2023) 5.0
2. Source: World Economic Outlook Database – April 2023; * indicates estimated figure
ADB (Asian Development Outlook, April 2023) 4.8 85
*) Consensus Forecast number will be given later
GDP Growth Breakdown
GDP Growth Based on Expenditures (%, YoY)1
2018 2019 2020 2021 2022 2023 Share

Economic Growth by Expenditure
Total Total Total Q1-2021* Q2-2021* Q3-2021* Q4-2021* Total Q1-2022** Q2-2022** Q3-2022** Q4-2022** Total Q1-2023*** (%)
GDP Growth (% yoy) 5,17 5,02 (2,07) (0,69) 7,08 3,53 5,03 3,70 5,02 5,46 5,73 5,01 5,31 5,03
Private Consumption 5,14 5,16 (2,67) (2,25) 5,92 1,06 3,55 2,01 4,37 5,49 5,40 4,50 4,94 4,57 54,06
Household Consumption 5,05 5,04 (2,63) (2,21) 5,96 1,02 3,56 2,02 4,34 5,51 5,39 4,48 4,93 4,54 52,88
NPI Serving Households Consumption 9,15 10,62 (4,21) (3,65) 4,06 2,87 3,20 1,62 5,90 5,02 5,97 5,70 5,64 6,17 1,17
Government Expenditure 4,82 3,27 2,12 2,57 8,22 0,65 5,29 4,24 (6,62) (4,63) (2,55) (4,77) (4,51) 3,99 5,32
Gross Fixed Capital Formation 6,68 4,45 (4,96) (0,21) 7,52 3,76 4,49 3,80 4,08 3,09 4,98 3,33 3,87 2,11 29,11
Building 5,41 5,37 (3,78) (0,74) 4,36 3,36 2,48 2,32 2,58 0,92 0,07 0,11 0,91 0,08 21,69
Nonbuilding 10,44 1,83 (8,44) 1,44 18,50 4,96 10,40 8,42 8,63 9,71 19,32 12,11 12,53 7,93 7,42
Export 6,51 (0,48) (8,42) 2,17 28,41 20,74 22,24 17,95 14,22 16,40 19,41 14,93 16,28 11,68 22,71
Import 12,14 (7,13) (17,60) 5,21 33,20 31,08 32,61 24,87 16,04 12,72 25,37 6,25 14,75 2,77 (19,56)
Source: Central Bureau of Statistics of Indonesia (BPS), ** Including non-profit household consumption
GDP Growth by Sector (%, YoY)
2018 2019 2020 2021 2022 2023 Share

Economic Growth by Sector
Total Total Total Q1-2021* Q2-2021* Q3-2021* Q4-2021* Total Q1-2022** Q2-2022** Q3-2022** Q4-2022** Total Q1-2023*** (%)
Economic Growth (% yoy) 5,17 5,02 (2,07) (0,69) 7,08 3,53 5,03 3,70 5,02 5,46 5,73 5,01 5,31 5,03
Agriculture, Forestry, and Fishery 3,88 3,61 1,77 3,48 0,56 1,44 2,33 1,87 1,16 1,68 1,95 4,51 2,25 0,34 11,77
Mining and Quarrying 2,16 1,22 (1,95) (2,02) 5,22 7,78 5,15 4,00 3,82 4,01 3,22 6,46 4,38 4,92 11,85
Manufacturing 4,27 3,80 (2,93) (1,38) 6,58 3,68 4,92 3,39 5,07 4,01 4,83 5,64 4,89 4,43 18,57
Construction 6,09 5,76 (3,26) (0,79) 4,42 3,84 3,91 2,81 4,83 1,02 0,63 1,61 2,01 0,32 9,88
Wholesale and Retail Trade 4,97 4,60 (3,79) (1,28) 9,50 5,12 5,54 4,63 5,73 4,43 5,37 6,55 5,52 4,89 12,95
Transportation and Warehousing 7,05 6,38 (15,05) (13,09) 25,10 (0,72) 7,93 3,24 15,79 21,27 25,80 16,99 19,87 15,93 5,56
Information and Communication 7,02 9,42 10,61 8,72 6,90 5,54 6,24 6,82 7,15 8,06 6,95 8,75 7,74 7,19 4,19
Financial and Insurance Services 4,17 6,61 3,25 (2,97) 8,33 4,29 (2,59) 1,56 1,64 1,50 0,87 3,76 1,93 4,48 4,31
Other Services 6,18 6,66 (1,24) (2,51) 9,83 (0,84) 3,43 2,35 3,33 4,03 7,88 4,95 5,04 4,55 16,32
Source: Central Bureau of Statistics of Indonesia (BPS)

*Other services consist of 10 sectors (according to Standard National 2008) 86
Economic Performance In All Regions Remains Solid
Economic growth in the first quarter of 2023 was recorded at 5.03% (yoy), up slightly from 5.01% (yoy) in the previous period…
Source: Central Bureau of Statistics of Indonesia (BPS), calculated

87
Economic Performance in Most Sectors Continue to Improve
Sound performance in all economic sectors supporting solid economic growth, in particularly the manufacturing industry, wholesale and
retail trade as well as transportation and storage. Indonesia’s economy is mainly supported by services sector, manufacturing, and
primary sector. Services sector (wholesale and retail trade, information and communication, financial and insurance service) has
expanded the last five years, while primary sector (mining and quarrying) has benefited from higher commodity prices in 2022.
%
Indonesia's GDP Share (%)
100,0
90,0 17,55 17,64 17,88 18,03 18,20 18,64 18,66 18,47

18,35 18,68 19,10 18,88 19,16 19,87 19,26 18,52 18,54 17,08 18,18 18,07 17,09 16,66 16,19 17,09 16,75 16,32
80,0 3,46
3,49 3,72 3,88 3,86 4,26 4,34 4,16 4,00 4,05 4,13 4,31
3,60 4,03 4,19 4,20 4,15 4,24 4,70 4,44 4,32 4,51 4,58 4,41 4,12 4,34
3,73 3,61 3,57 3,50 4,56 4,02
3,53 3,52 3,62 3,78 3,77 4,58 4,43 4,37 4,41 4,35 4,12 4,13 4,15 4,19
70,0 3,57 3,63 3,93 4,42 3,96 4,25 4,66 4,56
4,57 4,51
3,90
4,28 5,03
5,02 5,20 5,41 5,38 3,57 4,27 4,21 4,24 4,62 4,82 5,56 5,02 5,56
5,57 5,17 4,39 4,47 4,56
4,67
13,46 13,61 13,21 13,21 13,43
60,0 13,00 12,79 12,77 12,85 12,95
13,30 13,19 13,02 13,02
13,01 13,19 12,81 12,80 12,84 12,91 13,07 13,07 12,71 12,96 13,10 12,76
50,0 9,13 9,09 9,35 9,49 9,86 10,38 9,18 9,49

10,21 10,38 10,38 10,53 10,55 10,59 10,79 10,11 10,48 10,44 10,43 10,01 9,77 9,88
10,75 10,70 10,95 10,70
40,0
22,04 21,76 21,45 21,03 21,08 17,92 17,97
20,99 20,52 20,16 19,86 19,85 19,84 19,28 19,14 18,79 19,24 19,21 18,32 18,34 18,57
30,0 19,70 19,97 19,80
19,87 19,82
20,0 10,46 11,81 11,61 11,01 9,83 6,27 9,55 12,64 13,03
7,65 7,18 7,58 8,08 7,26 6,82 6,15 6,43 7,64 8,09 10,43 8,97 10,37 12,65 12,22 11,85
6,48
10,0
13,93 13,51 13,37 13,36 13,34 13,49 13,48 13,16 12,81 12,71 12,84 15,44 14,67 11,97 13,70 13,23 14,29 14,32 11,39 13,28 12,57 13,08 13,00 11,00 12,40 11,77
-
10
11
12
13
14
15
16
17
18
19
20
21
22
20
20
20
20
21
21
21
21
22
22
22
22
23
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
1-
2-
3-
4-
1-
2-
3-
4-
1-
2-
3-
4-
1-
Q
Q
Taxes Other Services Financial and Insurance Services Information and Communication
Transportation and Warehousing Wholesale and Retail Trade Construction Manufacturing
Mining and Quarrying Agriculture, Forestry, and Fishery
Source: Central Bureau of Statistics of Indonesia (BPS), calculated 88
Solid Fundamentals Facing the Headwinds
Inflation Rate (%)

IDR Movement (%) Foreign Reserves (USD bn)
Inflation above the target range, but below the
projection IDR depreciated year-to-date Significantly higher than 1998 & 2008, ample to cover
6.3 months of import and external debt repayment
1998 -197
1998 82,4 1998 17,4
2008 -35
2008 12,1 2008 50,2
12-Oct-20
24 May 23 4.48 (ytd)
May 2023
Sep-15 4.00
6,8 (yoy) May Sep-15
2023 139.3
-300 -200 -100 0
Non-Performing Loan/NPL (%) More Liquid Market (%)

In the markets, the IndONIA rate is in line with the higher BI7DRR and
NPL level (gross) is below the maximum threshold of 5% strengthening the monetary operations strategy of BI
62
1998 30
2008 3,8
10,5
5.62
5,7
Apr 2023
August 2020 2.53
3,22
1998 2008 21 June
Jul-15 2023
0 5 10 15 20 25 30 35 40
External Debt (Public & Government Debt/GDP External Debt/GDP

Private) to FX Reserve Ratio
Consistently well-maintained Significantly lower than 1998 crisis
Significantly lower than 1998 crisis
8.6x 3.1x 2.8x 100.0% 27.4% 37.85% 116.8%

30.1%
33.2%
2008 Apr 2023

2008 May 2023 2008 Q1-2023
1998 1998
1998
Pada Gov’t Debt/GDP: 89
Outlook of Domestic Economy Remains Robust
...the domestic economic recovery is continued to strengthen in 2023
2023 Economic Outlook

l Bank Indonesia projects economic growth in 2023 continue to accelerate to the range of 4.5-5.3% in 2023.
l Bank Indonesia is confident core inflation will remain at the 3.0%±1% target during the first semester of 2023 and CPI
inflation will return to the 3.0%±1% target in the second semester of 2023
l Bank Indonesia projects BOP outlook for 2023 is good, with a manageable current account maintained in the range of a
0.4% of GDP surplus to a 0.4% of GDP deficit
l Bank Indonesia projects credit growth in 2023 will grow by 10.0-12.0%
Economic Growth Inflation CAD (% of GDP) Credit Growth
2018
5.17% 3.13% 2.98% 11.75%
Realization
2019
5.02% 2.72% 2.71% 6.08%
Realization
2020
-2.07% 1.68% 0.4% -2.4%
Realization
2021
3.69% 1.87% surplus 0.3% 5.24%
Realization
2022 surplus
5.31% 5.51% 11.35%
Realization 1.0%
surplus 0.4% -
2023 4.5-5.3% 3.0±1% 10-12%
deficit 0.4%
Source : Bank Indonesia
90
Section 4
External Factor:
Improved External Resilience
External Sector Remains Resilient
… Supported by Adequate Reserves and Sound Balance of Payments
Balance Of Payment Remains Solid Current Account Recorded Surplus

US$bn 2015: 2016: 2017: 2018: 2019: 2020: 2021: 2022:
Current Ac count Capital and Financ ial Account US$bn CA Deficit CA Deficit CA Deficit CA Deficit CA Deficit CA Surplus CA Surplus CA Surplus
20 160 (US$17.5bn) (US$16.9bn) (US$16.2bn)(US$30.6bn) (US$30.3bn) (US$4.4bn) US$3.5bn US$13.2bn
Overall Balance Reserve Asset (rhs) US$bn
145,19
15 23 2,00
Goods Services
120 18 0,89 1,00
10 Primary Income Secondary Income
6,52 13
5 3,38 -
14,72
2,97 80
8
0 (1,00)
3
1,47 (2,00)
-5 (2)
40
(8,60)
(7) (3,00)
-10
(12) (4,62) (4,00)
-15 0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1
2015 2016 2017 2018 2019* 2020* 2021* 2022**2023** 2015 2016 2017 2018 2019* 2020* 2021* 2022** 2023**
Source: Bank Indonesia Source: Bank Indonesia
Trade Balance Surplus Continues Official Reserve Assets Increased to Reinforce External Sector Resilience
2017: 2018: 2019: 2020: 2021: 2022:
US$bn Surplus Deficit Deficit Surplus Surplus Surplus FX Reserves as of April 2023: US$139,3bn
US$11.83bn (US$8.65bn) (US$3.24bn) (US$21.81bn) (US$33.8bn) (US$54.52bn)
15
(Equiv. to 6.0 months of imports + servicing of government debt)
US$bn FX Reserves (LHS) Month of Impo rt & Debt Service (RHS) Month
150 15
10 OG Non-OG Total 140 14
13
130 12
120 11
10
5 110 9
2,26 100 8
7
90 6
0 0,44 80 5
4
70 3
-1,82 2
60 1
-5 50 -
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 5 1 3 5 7 9 1 3 5 7 9 1 3 5 7 9 1 3 5 7 9 1 3 5 7 9 1 3 5
11 11 11 11 11
2017 2018 2019 2020 2021 2022 2023
2018 2019 2020 2021 2022 2023
Source: BPS * Preliminary Figure ** Very Preliminary Figure Source: Bank Indonesia 92
Exchange Rate Movement Supported by BI Stabilization
Measures
Movement of Rupiah 17.000 Rupiah exchange rates remain under control in
As of 21-Jun-23 16.500 line with the stabilisation measures implemented
Quarterly Average by Bank Indonesia. Global financial market
15568 16.000
IDR/USD
uncertainty induced slight rupiah depreciation in
14893 14935 15223 15.500 June 2023 (as of 21st June 2023), depreciating by
14566
14373 14945
15.000
0.56% compared with the average rate recorded in
14157
14339 14399 May 2023. Point-to-point, however, the rupiah
14120 14849 14.500 regained lost value compared with the levels
14669 14.000 recorded in May 2023 and at the end of 2022,
14259
14064 14219 appreciating by 0.30% and 4.17% respectively.
14344 13.500
Compared with conditions at the end of 2022,
13.000 rupiah appreciation exceeded the Indian rupee
24-Sep-19
2-Jan-20
11-Feb-20
18-Sep-20
25-Feb-21
13-Sep-21
20-Feb-22
28-Sep-22
6-Jan-23
15-Feb-23
10-Jun-20
30-Jun-20
25-Jun-21
20-Jun-22
15-Jun-23
6-Apr-21
1-Apr-22
1-May-20
6-May-23
2-Mar-20
7-Mar-23
26-Jul -19
20-Jul -20
9-Aug-20
15-Jul -21
4-Aug-21
10-Jul -22
30-Jul -22
4-Sep-19
23-Nov-19
17-Nov-20
5-Feb-21
12-Nov-21
8-Sep-22
27-Nov-22
13-Dec-19
27-Dec-20
5-Jun-21
22-Dec-21
17-Dec-22
14-Oct-19
28-Oct-20
23-Oct-21
18-Oct-22
22-Jan-20
16-Jan-21
11-Jan-22
31-Jan-22
26-Jan-23
11-Apr-20
26-Apr-21
21-Apr-22
16-Apr-23
6-Jul-19
3-Nov-19
21-May-20
16-May-21
11-May-22
31-May-22
7-Nov-22
26-May-23
22-Mar-20
7-Dec-20
17-Mar-21
2-Dec-21
12-Mar-22
27-Mar-23
15-Aug-19
29-Aug-20
8-Oct-20
24-Aug-21
3-Oct-21
19-Aug-22
(0.85%) and Philippine peso (0.15%), with the Thai
baht losing 0.70% in value. Moving forward, Bank
Indonesia expects the rupiah to continue
appreciating, supported by a positive current
Rupiah Exchange Rate Volatilty account and foreign capital inflows in line with the
promising economic growth outlook, low inflation
TRY -20,74 -15,01 and attractive yields on domestic financial assets
ZAR -9,68 -7,30 for investment. Bank Indonesia will continue
INR 0,86
-4,26
CNY -4,10
-2,52 strengthening rupiah stabilisation policy, in
JPY -7,62 particular through triple intervention policy and
-1,92
IDR 4,17
PHP
-1,24
0,15 the twist operation to manage imported inflation
-1,09
MYR -5,18 and mitigate the contagion risk of global financial
-1,04
KRW 2023 vs 2022 (YTD)
-2,04
0,10 market uncertainty. Furthermore, Bank Indonesia
BRL 10,28
poi nt-to-point average 1,66
1,99
is also strengthening foreign exchange operations
EUR 2,49
THB As of 21-Jun-23 -0,73 by optimising foreign currency term deposits (TD
2,93
SGD -0,34
3,28 Valas) for foreign exchange proceeds of exports
-25,0 -20,0 -15,0 -10,0 -5,0 0,0 5,0 10,0 15,0
(DHE), as well as increasing the auction frequency
and short-term tenors of TD Valas.
Source: Reuters, Bloomberg (calculated) 93
Ample Lines of Defense Against External Shocks
Ample Reserves
l Ample level of FX reserves to buffer against external shock

FXD,Reserve
l FX Reserves as of of May 2023: US$139.3 bn
Swap Arrangement
l Renewed a 3 year USD22.76 billion swap line with Japan on October 14th, 2021
Japan
l The facility is available in USD and JPY
l Renewed a 1 year SGD/IDR swap arrangement with the size up to SGD 9.5 bn / IDR 1000 tn (equivalent) in
Singapore
November 2022
Bilateral
l Renewed a 3 year swap arrangement and increased the size of swap line up to CNY 250 bn / IDR 550 tn
China
(equiv.) in January 2022
l Established a 3 year RM/IDR swap arrangement with a size up to RM 8 billion / IDR 28 trillion (equiv.) in
Malaysia
September 2022
l Renewed a 3 year A$/IDR swap arrangement with a size up to A$10 billion or IDR 100 trillion in February
Australia
2022
Chiang Mai l Entitled to a maximum swap amount of US$ 22.76 bn under the ASEAN+3 (Japan, China, and Korea) FX
Regional
Initiative reserves pool created under the agreement

Multilateralization l Came into effect in 2010 with a pool of US$120 bn
(CMIM) Agreement l Doubled to US$240 bn effective July 2014
IMF Global
Global
l Indonesia is entitled to access IMF facilities for crisis prevention to address potential (actual) BOP problem
Financial Safety
l Such facilities include Flexible Credit Line (FCL) and Precautionary and Liquidity Line (PLL)
Net - GSFN
Source: Bank Indonesia 94
Healthy External Debt Profile
External Debt Structure The Structure of External Debt is Dominated by Long-Term Debt
Private External Debt Public External Debt
Short Term External Debt Long Term External Debt
100% 100%
90% 90%
80%
50,5 80%
70%
70%
60%
60% 83,6
50%
50%
40%
40%
30%
49,5 30%
20%
20%
10%
10% 16,4
0%
0%
Apr-23**
Q1-2023*
Jan-22*
Jan-23*
Nov-21
Mar-22*
Sep-22*
Q1-2019
Q3-2019
Q1-2020
Q3-2020
Jan-21
Jul-22*
2009
2011
2013
2015
2017
May-21*
May-22*
Mar-21
Sep-21
Jul-21
Nov-22*
*
3*
M 22*
1- 3*
Ja -21
r *
Se 2*
09
11
13
15
1- 7
M 22*
N 22*
M 21
3- 9
1- 9
3- 0
Ja 0
Ja 22*
Ju *
Ju 2*
Se 1
M -21
N 21
Ap 023
l- 2
1
Q 01
Q 01
Q 01
Q 02
-2
l- 2
-2
-2
Q 2
20
20
20
20
p-
20
n-
ar
ov
p-
-
n-
n-
2
2
2
2
ar
ay
ay
ov
2
External Debt Remains Manageable External Debt to GDP Ratio & Debt to Export Ratio
Million USD % 39,3
39,0
% 38,1 37,4
36,1 37,3 37,0
External Deb t External Deb t Growth (yoy) - rhs 240 36,7
36,5 40
450.000
17,1
20,0 36,1 36,0 36,1 34,9
34,7
34,3 34,4 33,6
400.000 220 31,8 32,9 31,7 35
15,0 29,1 30,2
350.000 11,5 11,312,0 200 26,5 27,4 214,6 30
10,2 10,1 25,0 206,9 208,8 30,1
300.000 10,0 180 197,2 25
5,9 6,5 189,2
5,4 183,3
250.000
160 177,0 177,2
176,1 172,2 172,0 175,3 20
3,0 2,9 2,6 2,1
5,0 168,4 168,6 168,4
200.000 0,7 1,2 1,3 0,9 0,4 156,6
-0,1-0,4 140 15
-1,0 -1,6 -1,2-0,9-0,8 145,2 118,9
150.000 0,0 139,5
-3,9 120 External Debt/ Export Ratio (rhs) 131,1 10
100.000 121,8 123,1 121,3
-5 ,0 100 114,9 113,8 5
50.000 External Debt/ GDP Ratio
101,0
80 0
0 -1 0,0
Q3 9
Q1 9
Q3 0
Q1 20
09
11
13
15
Q1 7
Q1-2019
Q2-2019
Q3-2019
Q1-2020
Q2-2020
Q3-2020
Q3 1*
Q1 1*
Q3 2*
2*
*
Q1-2021*
Q2-2021*
Q1-2022*
Q2-2022*
Q3-2022*
Q4-2022*
Mar-23**
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021**
01
01
02
1
3*
0
20
20
20
20
20
02
02
02
02
-2
-2
-2
-2
-2
-2
-2
-2
-2
ar
M
Source: Bank Indonesia, External Debt Statistics of Indonesia *Provisional Figures **Very Provisional Figures 95
Strengthened Private External Debt Risk Management
Debt Burden Indicator (External Debt/GDP) Remains Comparable to Peers Rating Encouraging Corporates Compliance on Hedging Ratio & Liquidity Ratio
External Debt/GDP (%) Hedging Ratio*

Uruguay 67,7 79,4 87,2 144 corporates
304 corporates (5.7%)
26,6 (12%)
Philippines 27,0
27,2
2022
Panama 50,0
51,6
55,2 2021
Mexico 37,6
34,6 2020
42,7 > 3 - 6 months
≤ 3 months
Kazakhstan 81,3 88,9 2381
96,2 2221 corporates
Indonesia 31,8
35,1 corporates (94.2%)
39,4 (88%)
Colombia 53,1
54,5
57,2
Source: Moody’s Credit View Fundamental Data, September 2022 Liquidity Ratio*
Regulation on Prudential Principle in Managing External Debt
342
Regulation Key Points 1 Jan 17 & beyond corporates
(13.5%)
Object of Regulation Governs all foreign currency Debt
Hedging Ratio
≤ 3 months 25%
> 3 – 6 months 25%
Liquidity Ratio 2183
70%
(≤ 3 months) corpor
Minimum rating of BB- ates…
Credit Rating
(State-owned Enterprises)
Must be done with a bank in
Hedging transaction to meet hedge ratio Compl y Not Comply
Indonesia
Sanction Applied
*Data as of Q4-2022, with total population 2,515 corporates
Source: Bank Indonesia
Section 5
Fiscal Performance and Flexibility:
Strong Commitment in Maintaining Fiscal Credibility
UP TO MAY 2023 GOVERNMENT BUDGET REMAINS SOLID AND RESILIENT
IN SUPPORTING ECONOMIC RECOVERY
2022 2023 Positive Growth in Main Sector Tax Revenue (YoY)

Account % to Real.
(IDRtn) Real. % to Growth Jan - May 2023 Jan - May 2022
Revised Growth Budget as of
as of Budget (%)
Budget (%) 31 May Share
31 May
Manufacturing 9,4%
A. Revenue 1,070.1 47.2 47.3 2,463.0 1,209.3 49.1 13.0 27.6% 50,9%
I. Tax Revenue
845.8 47.9 51.3 2,021.2 948.7 46.9 12.2
(DG Tax & Custom-Excise) Trade 9,3%
21.2% 61,6%
1. Tax 705.5 47.5 53.5 1,718.0 830.3 48.3 17.7
2. Custom & Excise 140.3 46.9 41.3 303.2 118.4 39.0 (15.6) 62,9%
14.9% Mining
II. Non-Tax Revenue 224.2 46.5 33.7 414.4 260.5 59.0 16.2 259,7%
B. Expenditure 938.2 30.2 (0.8) 3,061.2 1,005.0 32.8 7.1 Financial Services &
13.0% 28,2%
I. Central Government 653.9 28.4 1.0 2,246.5 714.6 31.8 9.3 Insurance 24,3%
1. Line Ministries
319.2 33.7 (11.3) 1,000.8 326.2 32.6 2.2 Transportation & 46,5%
Spending 4.2% Warehouse 13,7%
2. Non-Line Ministries 334.7 24.7 16.3 1,245.6 388.4 31.2 16.0
II. Regional Transfer & Construction & Real 10,9%
284.3 35.3 (4.6) 814.7 290.3 35.6 2.1 3.9% 13,3%
Village Funds Estate
C. Primary Balance 298.6 (68.8) 542.8 (156.8) 390.5 (249.1) 30.7
3.2% Business Services 37,7%
D. Surplus (Deficit) 132.0 (15.7) 160.2 (598.2) 204.3 (34.2) 54.8 19,0%
% to GDP 0.67 (2.84) 0.97
Information & 15,5%
E. Financing 83.6 10.0 (73.1) 598.2 118.4 19.8 41.6 3.1% 36,7%
Telecommunication
SLOWING CUSTOMS AND EXCISE REVENUES IMPACTED BY DECLINING
OUTWARD DUTIES AND TAXES COLLECTION
Excise Revenue Import Duty Revenue Export Duty Revenue
41,73%
20,46% 12,13%
-12,45%
102,74 32,47% 7,87% 844,63%
-7,86% 3,56%
89,95 20,41
18,92 -27,54% 54,46%
-67,52%
72,49 15,85
64,65 14,28
13,79
10,26
5,15
1,09
Jan - May Jan - May Jan - May Jan - May Jan - May Jan - May Jan - May Jan - May Jan - May Jan - May Jan - May Jan - May
2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023
Excise (IDR Trillion) Growth Import Duty (IDR Tri llion) Growth Export Duty (IDR Trill ion) Growth
Decline in Tobacco Excise Revenues Due to Growth in Import Duty Performance driven by, Affected by the moderated decline in
Decreased Production in March 2023 among others, Increased Import of Key CPO prices and the decrease in mineral
Compared to Last Year, Resulting from the Commodities such as Spare Parts, Basic Iron commodity export volume
Previous Increase in Value Added Tax (VAT). and Steel, and Mining Machinery.
UNTIL MAY 31, 2023, THE REALIZATION OF NON-TAX STATE REVENUE
(PNBP) HAS EXPERIENCED AN UPWARD TREND
98,1
1,5 -24,7 -17,9 -18,8
Non-Tax Revenue
Oil & Gas 51,4 38,7 31,8 62,9 51,1
35,0% Revenue 2019 2020 2021 2022 2023

21,5% 14,9% 22,8% 16,2%
Oil & Gas (IDR tri llion) Growth (%)
260,5 105,3 116,9
48,4
-4,7
224,2 Non-Oil & -23,7
13,6 10,4 15,4 31,7 68,7
Gas
2019 2020 2021 2022 2023
Revenue
Non Oil & Gas Growth (%)
167,6
158,5
41,0 -26,8 -36,5 64,7 62,7
137,0
Separated 32,8 24 15,2 25,1 41,7
State Asset 2019 2020 2021 2022 2023
Separated State Assets (IDR T) Growth (%)
30,3 37,4
6,6 15,5
-1,1
Other Non- 41,6 44,3 60,9 70,4 69,6

Tax Revenues
2019 2020 2021 2022 2023
Other Non-Tax Revenues (IDR T) Growth (%)
Jan - May 2019 Jan - May 2020 Jan - May 2021 Jan - May 2022 Jan - May 2023
Public 10,3 6,3 126,9 -23,0 -13,5
Services 18,4 19,5 44,3 34,1 29,5

Non Tax Revenue (IDR Trillion) Growth
Agency (BLU) 2019 2020 2021 2022 2023
Source: Ministry of Finance, YTD 31 May 2023
Revenue Public Service Agency (IDR T) Growth (%)
GOVERNMENT MAINTAINS FOCUS ON PRIORITY SPENDING
Enhanced central government spending for direct community benefits
Pension Benefit Subsidy Compensation
26,7 33,3 188,1

15,7
5,3 6,4 5,0 -3,4 -0,5

2,5
-17,0
0,0 0,0 0,0
56,5 59,4 63,2 64,8 68,0 50,6 48,9 56,6 75,4 75,1 0,3 -100,0 18,1 52,0
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
Realization (IDR T) % Growth Realization (IDR T) % Growth Realization (IDR T) % Growth
Education Spending Infrastructure Spending Health Spending

30,9 58,8 52,9
18,3
6,0 -0,2 16,3
-12,2 12,1 1,3
0,1 -11,2 -9,7
-16,7
-40,6
167,0 157,2 185,9 163,2 188,9 106,4 63,2 100,3 83,5 93,7 43,1 38,3 58,5 59,2 53,5
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
Realization (IDR T) % Growth Realization (IDR T) % Growth Realization (IDR T) % Growth
Source: Ministry of Finance, YTD 31 May 2023

101
INCREASED TRANSFER TO REGIONS WITH IMPROVED GOVERNANCE
Transfer to Region Fund
(January – May)
transfer to the region supports regional funding and
2023 IDR 290.3T infrastructure development in areas such as education,
(35.6% from budget)
healthcare, irrigation, water supply, agriculture,
transportation, tourism, economic growth, environment,
IDR284.2T
2022 and rural development. The distribution of transfers to
(35.3% from budget)
the region increased to IDR 290.3 trillion (35.6%)
Revenue Sharing (DBH)
General Allocation (DAU) compared to last year, primarily due to higher allocations
Physical Special Allocation (DAK Fisik) from sharing funds of Cigarette Excise, Mining, and Oil &
Non- Phy isical Special Allocation (DAK Non Fi sik)
Grant Gas.
Special Autonomy & Privilege Allocation for Yogyakarta
Village Fund
Incentive Fiscal
Special Fund
Local Government Performance
REVENUE SPENDING 68,92

n Local tax and retribution Budget expenditure 62,20
17,69
performance improved by 21,73 6,1 15,83 17,17
8,04 2,89 performance grew by
14.11% (YoY). Local gov’t 2,69 78,45
6.06% (YoY) due to 73,73
revenue is primarily driven by
Local Taxes (76.9%) and other 77,73 88,7 improved absorption
legitimate PAD (15.3%), while and delayed
136,4 141,08
Separate Local Financial transactions.
Management Results and Jan - May 2022 Jan - May 2023 Sustaining this
Local Retribution contribute Local Tax Retribution positive realization Jan - May 2022 Jan - May 2023
5.3% and 2.5% respectively. until year-end is
Return of Local Gov't Other Revenue Personnel Spending Material Spending
crucial.
Capital Spending Other Spendings
AS OF MAY 2023, BUDGET FINANCING HAS BEEN MAINTAINED WITHIN
SAFE LIMITS
while remaining vigilant towards the volatility of global financial markets and the availability of government liquidity
Financing Realization Up To 30 April Domestic Loan (Net) Foreign Loan (Net)

IDR 2.31 T IDR 3.57 T
150.4 • Domestic Loan Withdrawal • Foreign Loan Withdrawal

91.2 (Gross) IDR 3.12T (Gross) IDR 38.20T
• Domestic loan principal • Foreign loan principal
75,3 144,5
installment financing installment financing
16 5,9
IDR (0.81T) IDR (34.63T)
2022 2023
Loan (nett) Securities (nett)
Accelerate Investment in Priority Sectors for The Welfare of The Society
Housing Financing Liquidity Facility State Asset Management Agency Education Fund Management International Development
IDR 85.78T(Total Fund) As of May 2023, funding amounting to Agency (LPDP) Cooperation Fund (LDKPI)
IDR122.39 trillion has been allocated for IDR 8T (2023 Funding Target)
As of May 31, 2023, a total of 82,361 FLPP Financing LDKPI by IDR 2T
national strategic projects, including toll
(Housing Financing Liquidity Facility) homes Total Endowment Find as of May
roads, dams, ports, irrigation, water
have been disbursed to low-income 2023 IDR 134.11T
supply, railway lines, the national capital,
communities across 380 cities/regencies, with
and national strategic tourism areas.
a total value of IDR 9.21 trillion.
36
THE BASIC ASSUMPTIONS OF MACROECONOMIC OUTLOOK AND
TARGETS AND INDICATORS OF DEVELOPMENT FOR THE YEARS
2022-2024
2022 2023 2024

Macroeconomics Assumptions
Realization Budget Outlook KEM PPKF*
Economic Growth (%, yoy) 5.3 5.3 5.0 – 5,3 5.1 – 5.7
Inflation (%, ytd) 5.51 3.6 2.0 – 4,0 1.5 – 3.5
Exchange Rate (IDR/US$) 14,871 14,800 14,900 – 15,400 14,700 – 15,200
10Y T-Bonds Rate (%) 6.96 7.9 6.73 – 7.05 6.49 – 6.91
ICP(USD/barrel) 97.09 90 80 – 85 75 – 80
Oil Lifting (thousand bph) 612 660 610 – 640 615 – 640
Gas Lifting (thousand bsmph) 953 1,100 950 – 1,100 1,030 – 1,036
Development Targets and Indicators
Poverty (%) 9.57 7.5 – 8.5 6.5 – 7.5
Gini Ratio 0.381 0.375 – 0.378 0.374 – 0.377
Unemployment (%) 5.86 5.3 – 6.0 5.0 – 5.7
HDI 72.91 73.31 – 73.49 73.99 – 74.02
Farmer’s Exchange Rate 107.33 105 - 107 105 - 108
Fishermen’s Exchange Rate 106.45 107 - 108 107 - 110
Note: Macroeconomic Framework and Key Fiscal Policies (the numbers have been approved by parliament)
PROPOSAL FOR THE 2024 GOVERNMENT BUDGET
Focuses on using the state budget as a tool to expedite inclusive and sustainable economic transformation.
Note:
% of GDP
2023 Budget

Note: The figures have been approved by the parliament
2023 Budget Financing
Increasing productivity for an inclusive and sustainable economic transformation
Source: Ministry of Finance 106

2023 Financing Needs
Kebutuhan
Kebutuhan Sumber
Financing
Pembiayaan
Sources
Financing Needs Sumber Pembiayaan
Pembiayaan
Pembiayaan
Budget Deficit Foreign

Foreign
Local Domestic
(2,84% GDP) Loan Currency currency Loan
(15%-25%) (75%-85%)
Foreign
Domestic
Denominated
Bonds GS
o Investment financing
o Lending Gross GS 2023
Matured
(Auction & non- T-Bills
o Liabilities auction) Issuance
o Other financing
Sukuk
o Matured debt 30-36% GDS
70-64%

2023 Financing Policies
Our Debt financing policies encourage flexible and sustainable debt management to support economic transformation. Amidst
increasing global risks, fiscal pressures, and moderating domestic SBN demand, we will optimize non-debt financing sources
considering the high financing needs and choosing the right timing for issuance.
Management of prudent and sustainable debt financing by

controlling debt risk at a safe and credible level
General Prioritizing domestic sources of financing to increase financial
debt
independence
policy
Procurement of foreign debt as an effort to mitigate the crowding
out effect.
direction Flexibility in debt financing, both in terms of timing and

composition, to obtain the most favorable costs and risks for the
government.
Utilizing cash loans within the framework of financing flexibility to ensure the
fulfillment of financing, while the choice of cash loan currency takes into account
cash requirements and debt portfolio management

DEBT FINANCING
As of May 31st , 2023
Budget Financing continues to well risk-controlled, among others through optimal composition, good related to currency, interest rates, and maturity
Government Securities Rp144.5

(Net)
Debt
Financing
Loan Rp5.9
Realization (Net)
Rp 150.4 (21.6%)
Foreign Loan (Net)
Rp38.2
Note :
1. all numbers in trillion Rupiah
2. The percentage is the percentage of budget ceiling from National Budget year 2023

GS Financing Realization 2023
(Trillion IDR)
Realization
(ao. May 31, 2023)
Government Securities (GS) Nett 144.04
Government Securities (GS) Gross 401.41
Government Debt Securities (GDS) 276.59
IDR Denominated GDS 217.82
- Coupon GDS 164.80
- Conventional T-Bills 26.45
- Private Placement (+ Voluntary Disclosure Program) 4.38
- Retail Bonds 22.18
Foreign Denominated Bonds 58.78
- SEC USD-EUR ( - Buyback LM) 46.77
- Samurai Bond 11.24
- SDG Bonds 0.00
- Valas Voluntary Disclosure Program 0.77
Sovereign Sharia Securities (Sukuk) 124.82
Domestic Sovereign Sharia Securitoes 76.46
- IFR/PBS/T-Bills Sukuk (Islamic Fixed Rate Bond/Project Based Sukuk 101.00
- Retail Sukuk 21.49
- Private Placement 2.32
Global Sukuk 0.00

Primary Market Performance 2022 – 2023
Government Securities (GS)

500 Incoming Bids Awarded Bids 6.00
2022 Avr Incoming Bids 2022 Avr Awarded Bids
450
Bid to Cover Ratio [RHS]
4.77 5.00
400
350
4.00
3.56
300
3.11
250 2.73 2.78 3.00
2.62 2.60
2.45 2.40
2.24 2.25 2.14 2.27
200
1.96 2.02
1.81 1.78 2.00
150 IDR32.25 tn
per auction IDR12.46 tn
per auction
100 In 2023:
1.00
• average incoming bid =
50 IDR40.72 tn/auction
• average awarded bid =
- - IDR15.38 tn/auction

Ownership Of Tradable Domestic Government Securities
Description Dec-19 Dec-20 Dec-21 Dec-22 May-23 Portion of foreign

Banks* 581.37 21.12% 1,375.57 35.54% 1,591.12 34.01% 1,697.43 31.97% 1,726.37 31.76% 70.41
ownership in the mid
Govt Institutions (Bank Indonesia**) 262.49 9.54% 454.36 11.74% 801.46 17.13% 1,020.02 19.21% 933.73 17.18% % & long term sector (≥
Bank Indonesia (gross) 273.21 9.93% 874.88 22.60% 1,220.73 26.09% 1,453.58 27.38% 1,413.25 26.00% 5 years)
GS used for Monetary Operation 10.72 0.39% 420.51 10.86% 419.27 8.96% 433.57 8.17% 479.51 8.82%
Non-Banks 1,908.88 69.34% 2,040.83 52.72% 2,286.40 48.87% 2,591.98 48.82% 2,775.72 51.06% IDR on January 24, 2020,
1,092.02 foreign holders reach
Mutual Funds 130.86 4.75% 161.32 4.17% 157.93 3.38% 145.82 2.75% 168.47 3.10%
T a record high in
Insurance Company and Pension Fund 471.67 17.13% 542.82 14.02% 655.24 14.00% 873.03 16.44% 934.40 17.19%
nominal terms
Foreign Holders 1,061.86 38.57% 973.91 25.16% 891.34 19.05% 762.19 14.36% 829.36 15.26%
Foreign Govt's & Central Banks 194.45 7.06% 178.31 4.61% 233.45 4.99% 203.11 3.83% 211.35 3.89%
Individual 81.17 2.95% 131.21 3.39% 221.41 4.73% 344.30 6.48% 366.34 6.74%
Others 163.32 5.93% 231.57 5.98% 360.47 7.70% 466.65 8.79% 477.16 8.78%
Total 2,752.74 100% 3,870.76 100% 4,678.98 100% 5,309.43 100% 5,425.54 100%
1) Non Resident consists of Private Bank, Fund/Asset Manager, Securities Company, Insurance
Company, and Pension Fund.
2) Others such as Securities Company, Corporation, and Foundation.
*) Including the Government Securities used in monetary operation with Bank Indonesia.
**) net, excluding Government Securities used in monetary operation with Banks.
Non-Banks,
Govt 51.06%
Institutions,
17.18%
Banks,
31.76%

Holders of Tradable Central Government Securities
Balanced Ownership In Terms of Holders and Tenors
Holders of Tradable Gov’t Domestic Debt Securities Foreign Ownership of Gov’t Domestic Debt Securities by Tenor
22,5% 20,3% 21,1% 24,2% 24,27% 24,19% 24,80% 25,60% 22,56%

23,9% 23,4% 29,6% 29,8% 30,0% 27,89% 28,4% 26,9% 27,1%
34,0% 32,0% 31,8%
35,5%
36,8% 42,0% 40,3% 39,5% 39,55% 40,08% 39,83% 39,15%

37,8% 39,9%
38,52% 34,8% 36,2% 36,9% 47,85%
38,4% 37,8% 36,7%
39,3%
46,9% 53,7% 53,0%
21,8% 22,1% 22,3% 22,8% 22,33% 22,17% 21,39%
20,93%
19,87%
23,8% 23,1% 18,7%
18,78%
18,97% 18,82% 17,57%
17,03% 16,56% 16,09% 15,65%
15,24% 14,31% 13,90% 14,27% 14,36% 15,26%
38,2% 37,5% 39,8% 37,7% 38,6%
25,2% 10,3% 10,14% 10,2% 9,9% 8,7% 8,6% 9,29% 9,15% 9,04% 8,76% 5,60%
19,0% 5,3% 5,1%
14,4% 15,3% 4,1% 4,3% 3,59% 4,8% 4,9% 5,0% 5,0% 4,57% 4,41% 4,95% 5,56% 5,21%
2,9%
Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 May-23
Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 May-23
0-1 >1-2 >2-5 >5-10 >10 % Foreign Ownership of Total
Foreign Holders Domesti c Non Banks Domesti c Banks

Disciplined and Advanced Debt Portfolio Management
Stable Debt to GDP Ratio Over the Years Prudent Fiscal Deficit
IDR Tn Government Debt / GDP (%)
1.177
878
9.000,00 39,36% 40,73% 39,57% 37,85% 45% 659
8.000,00 40% 442 358 446
7.000,00 887,04 853,26 35%
29,40% 29,81% 30,18%
27,46% 28,34% 819,86 14 53 1 30
6.000,00 30%
852,91
5.000,00 25% (20) (56) (57) (9)(35) (36) (7)
(269) (105)
(349)
6.934,25
6.846,89
4.000,00 764,48 20% (341) (464)
6.091,85
810,74
-1,80%
5.221,65
746,32 -2,38%
3.000,00 734,85 15% -2,50% -2,20%
4.014,80
(775)
3.612,69
755,12
3.248,93
-6,14% (948) -4,57%

2.780,86
2.000,00 10%
2.410,01
1.000,00 5% 2017 2018 2019 2020 2021 2022

- 0%
Government Securities (net) Domestic & Offshore Loan (Net)
2015 2016 2017 2018 2019 2020 2021 2022 May-23 Non-debt (net) Surplus (Deficit)
Bond Loan Debt to GDP Deficit/GDP (RHS)
Weighted Average Debt Maturity Well Diversified Across Different Currencies

% of Yearly Issuance
9,6
9,39 1% 1% 1% 1% 0% 0%
100% 5% 5% 4% 4%
6% 5% 4% 5% 3%
9,13 4% 5% 5%
9,2
80% 20% 20% 20%
27% 23%
30%
8,8 8,68
8,6 60%
8,52 8,5
8,37
8,4 8,27 8,24 40%
66% 70% 71% 72%
58% 62%
8 20%
7,6 0%
2015 2016 2017 2018 2019 2020 2021 2022 Ma y-23
2018 2019 2020 2021 Dec-22 May-23
ATM
Source: Ministry of Finance IDR USD EUR JPY OTHER
114
Well Balanced Maturity Profile with Strong Resilience
Against External Shocks
Interest Rate Risks (%) Declining Exchange Rate Risks (%)
28,0 25,5 50,0 44,6

21,0 22,0 26,6 42,6 41,3 41,0
23,0 20,7 19,7
19,2 40,0 37,9
17,5 33,5
16,1
18,0 30,0 29,2
30,0 27,8
13,0 10,6 10,6

6,6 8,9 20,0
12,2 12,1 12,1 12,2 11,4 13,2 12,2 11,6
8,0 10,5
13,7 12,1 10,6 10,6 9,8 8,4
10,0
3,0 7,6 7,4 8,2
0,0
(2,0) 2015 2016 2017 2018 2019 2020 2021 2022 Ma y-23
2015 2016 2017 2018 2019 2020 2021 2022 May-23
FX to GDP Ratio FX Proportion
VR Prop Non SKB VR Prop SKB Refixing Proportion
Debt Maturity Profile Upcoming Maturities (Next 5 Years)

IDR tn
800 IDR Denominated (Triliun Rp) Other Currencies (Triliun Rp)
50,0
700 42,5 43,05
39,3 40,4 41,0 39,6 40,1
600 40,0 34,7 36,0
500 30,0 25,0 25,5 24,6 25,17

22,7 24,3 22,8 22,8
21,4
400
20,0
300 9,9 10,6
8,4 8,1 7,8 7,5 8,37
492502526516454 10,0 6,5 6,4
200
332 347278
275 243232 0,0
100 204 171 119 143
111 130 76 62 69 67
73 73 74 28
15
16
17
18
19
20
21
22
3
21
-2
- 0
20
20
20
20
20
20
20
20
ay
M
2049-2071
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
1 Year 3 Year 5 Year

Republic of Indonesia USD3 bn Global Bonds Issuance
Transaction Highlight
Issuer Republic of Indonesia
• The first Emerging Asian sovereign issuer in 2023
Baa2 Moody’s (Stable) BBB S&P (Negative) and marks the Republic’s thirteenth successful
Issuer Rating
BBB Fitch (Stable) SEC-registered US$ transaction since 2018.
• A low new issuance concession for the transaction,
Format SEC-Registered Notes Offering
which was also one of the lowest amongst the
Pricing Date January 5, 2023 transactions launched on the same day
Settlement Investor Breakdown by Region

March 11, 2023
Date
Issue Size USD3 bn
Tenor 5year 10year 30year
Maturity January 11, 2028 January 11, 2033 January 11, 2053
Tranche Size USD1,0 bn USD1,25 bn USD750 milion
Coupon (p.a.) 4.550% 4.850% 5.650%
Price 98.900% 98.061% 98.678%

Investor Breakdown by Investor Type
Yield (p.a.) 4.800% 5.100% 5.750%
BofA Securities, DBS Bank Ltd., HSBC, Mandiri Securities and Standard
JLM
Chartered Bank
Listing Singapore, Frankfurt Stock Exchange
Use of Net proceeds from the sale of the Bonds will be used for the
Proceeds general purposes of the Republic
116 116
Section 6
Monetary and Financial Factor:
Credible Monetary Policy Track Record
and Favourable Financial Sector
Bank Indonesia’s Policy Mix Direction in 2023
Maintaining Stability, Accelerating Economic Recovery
• Monetary policy towards maintaining stability 1
• Policy rate increase as a follow-up step to ensure continued lower expected inflation and inflation in a front-loaded, pre-emptive, and forward-
looking measure to maintain core inflation within the range of 3.0±1%
• Strengthening rupiah stabilization policy as part of measures to control inflation, primarily imported inflation
ü Issuing new foreign exchange monetary operation instruments to boost placement of Export Proceeds, domestically by banks and exporters to
strengthen stabilization, including Rupiah exchange rate stability and national economic recovery
• Continue buying/selling SBN in the secondary market to strengthen transmission of the BI7DRR by increasing the attractiveness of SBN yields for
foreign portfolio investment inflows to strengthen exchange rate stabilization measures
n Accommodative macroprudential policy stance to reignite bank lending to the corporate sector and drive the national economic recovery, while 2
maintaining financial system stability
n Incentivize banks to disburse financing to priority sectors and promote inclusive financing
n Strengthen implementation of macroprudential Inclusive Financing Ratio (RPIM) to increase economic inclusion, unlock financial access, while
strengthening MSME's contribution to the national economic recovery
n Accommodative macroprudential policy stance, among others by: relaxing LTV/FTV, relaxing down payment requirement, CCB 0%, Macroprudential
Intermediation Ratio (MIR) 84-94%, Macroprudential Liquidity Buffer (MLB) at 6% with 6% repo flexibility, Sharia Macroprudential Liquidity Buffer
(SMLB) at 4.5% with repo flexibility at 4.5%
3
n Accelerating payment system digitalization to stimulate economic recovery and implementation of the
Indonesia Payment System Blueprint 2025
n Strengthen and expand digitalization through social programs, e-payment for Government
n Increase the number of participants, expand services and garner greater acceptance of BI-FAST for more
efficient transactions between banks and members of the public
n Expanding cross-border QRIS by, among others, accelerating implementation, piloting local currency settlement
(LCS) with other Asian countries and organising National QRIS Week
4
n Money market deepening by expanding underlying DNDF to boost liquidity and reinforce JISDOR as a reference for the exchange
rate in the FX market
n Accelerate key infrastructure development, including Electronic Trading Platforms (ETP) and a Central Counterparty (CCP)
n Continue to develop the Money Market Development Blueprint 2025
n Promote inclusiveness and the green economy in finance
5
n Controlling inflation through Inflation Control Team in national and regional level, and accelerating implementation of the National Movement for Food
Inflation Control (GNPIP)
n Support the national economic recovery program through cooperation and collaboration with the MOF
n Strengthening the coordination with the Government and related authorities to revive bank intermediation function
n Strengthening policy coordination with the Government and Financial System Stability Committee to maintain macroeconomic and financial system stability

Bank Indonesia Policy Mix: JUNE 2023
The BI Board of Governors agreed on 21st and 22nd June 2023 to hold the BI 7-Day Reverse Repo Rate at 5.75%, while also
maintaining the Deposit Facility (DF) rate at 5.00% and Lending Facility (LF) rate at 6.50%.
• Increasing macroprudential Increasing digital payment system

Strengthening rupiah stabilisation policy Strengthening
policy stimuli by honing the services and transaction efficiency, while
through: international cooperation
liquidity incentives for expanding the digital economy and
• Foreign exchange market intervention, with other central banks
banks disbursing finance by:
including spot and Domestic Non- and authorities in partner
loans/financing to • Extending credit card policy until 31st
Deliverable Forward (DNDF) countries, while
downstream sectors December 2023, including: (a)
Strengthening transactions, as well as buying/selling promoting trade and
(mining, agriculture, minimum payment policy for credit
Hold the monetary government securities (SBN) in the investment in priority
plantations and fishing), cardholders of 5% of the outstanding
BI 7-Day operations to secondary market sectors in collaboration
housing and tourism, while balance, and (b) late payment
Reverse increase the • The twist operation by selling short- with relevant institutions.
increasing financial penalties of 1% of the outstanding
Repo effectiveness term SBN in the secondary market to In addition, Bank
inclusion (MSMEs and KUR) balance up to a maximum of
Rate at of monetary increase the attractiveness of SBN Indonesia is also
as well as the green Rp100,000.
policy yields for foreign portfolio investment strengthening synergy
5.75% economy-finance. • Extending until 31st December 2023
transmission. inflows, and with relevant government
• Continuing prime lending the period for National Clearing
• Optimisation of foreign currency term ministries/agencies to
rate (PLR) transparency System (SKNBI) fees of: (a) Rp1 for
deposits (TD Valas) for foreign ensure a successful
policy with a focus on banks, and (b) up to Rp2,900 for bank
exchange proceeds of exports (DHE), ASEAN Chairmanship in
interest rates in the mineral customers.
as well as increasing the auction 2023, particularly in
and coal mining sector, • Adjusting the QRIS Merchant Discount
frequency and short-term tenors of TD terms of the finance
agricultural/food sector, Rate (MDR) for micro merchants to
Valas with competitive interest rates. track.
fishing, and marine sector 0.3%, effective 1st July 2023.

Monetary Policy will focus on stability
to stabilize Rupiah and manage inflation towards the target corridor, as part of mitigation
measures against the impact of global spillovers.

Manageable Monetary Environment amid Heightened
Global Uncertainty
Well Maintained Inflation Ensured Price Stability Strengthened Monetary Policy Framework
(%)
20 19 August 2016
CPI (%, yoy) rhs 8,00 The New Monetary
18 LF Rate: 7.00 Operation Framework
16 Core (%, yoy) - lhs 7,00 BI Rate: 6.50

LF Rate: 6.50
14 9,52
Volatile Food (%, yoy) - lhs2 BI 7Day RR Rate: 5.75
6,00
12
Administered (%, yoy) - lh s DF Rate: 5.00
10 5,00
8 3,28
4,00
6 2,66
4 3,00
2 4,00
2,00
0
23
0
2
16
16
17
18
19
2013 2014 2015 2016 2017 2018 2019 2020 2021 May-23
2
0
3
6
l- 2
l- 2
l- 2
-2
-2
-2
-2
-1
-2
-2
-2
n-
20
20
20
20
n-
ay
ar
ar
ar
ar
ov
ov
ov
Ju
Ju
Ju
Ju
Ja
3-
3-
3-
3-
M
N
N
M
Q
Rupiah Exchange Rate Volatilty Credit Growth Profile
% % yoy
60
20,0
Apr-23 Total Growth Working Capital Loans
50 Investment Loans Consumption Loans
May-23 15,0
12,69
38,18 Jun-23
40 10,0 9,62
7,39
26,03 as of 21 Juni 2023 30 5,0
9,39
21,43 21,03 19,39
20 0,0
15,03
11,98 12,85 12,00 12,98 13,46 11,65 10,54
7,49 8,45 5,25 -5,0
6,19 5,91 6,183,88 3,67 4,63 7,45
7,29 10
4,06 3,253,30 3,12 4,52
-10,0
-
Nov-21
Nov-22
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
Jan-23
Mar-21
Sep-21
Mar-22
Sep-22
Mar-23
Jul-15
Jul-16
Jul-17
Jul-18
Jul-19
Jul-20
Jul-21
Jul-22
May-21
May-22
May-23
Apr-23
BRL ZAR TRY IDR KRW THB MYR INR SGD PHP
Source: Reuters, Bloomberg (calculated) 121

Banking Intermediation 122
Despite the challenging global economic environment, Bank loans continued to grow, driven by investment
and business lending, with relatively stable growth in funding.
In April 2023, bank loans and Third-Party Funds (Total Deposits) grew at a Majority types of loans continued their positive trend, particularly
slower pace by 8.08% (yoy) and 6.82% (yoy), respectively. Investment loans, which grew by 10.12% (yoy) in April 2023
Working Capital Investment

YoY
YoY
Loan Third-Party Fund (Deposits) Consumption Total
20%
14%
12%
15%
10%
8,08% 10,12%
8% 10%
6% 6,82% 8,08%
4% 5% 8,68%
2% 6,55%
0%
0%
Oct-22
Oct-20
Apr-21
Oct-21
Apr-22
Apr-20
Apr-23
Apr-19
Oct-19
Jan-20
Jul-21
Jan-23
Jul-22
Jul-20
Jul-19
Jan-21
Jan-22
Jan-19
Oct-21
Oct-22
Oct-20
Apr-23
Oct-19
Apr-21
Apr-22
Apr-20
Jul-21
Apr-19
Jul-22
Jul-20
Jul-19
Jan-21
Jan-22
Jan-20
Jan-23
Jan-19
-2% -5%
-4%
-6% -10%
Third-Party Funds (Total Deposits) grew stable in April 2023, mainly

Loan growth by segmentation continued to improve in April 2023, with supported by Demand Deposits growth, which increased by 13.61%
major contribution from Corporation loans, which grew by 11.38% (yoy). (yoy), respectively.
YoY Deposits Savings

YoY MSMEs Consumption Corporation Total
30%
Demand Deposits Third-Party Fund
20%
25%
15% 8,68%
10% 8,44% 20%
8,08%
5% 15% 13,61%
6,83%
0%
10% 6,82%
-5%
5% 5,56%
-10% 2,57%
Oct-21
Oct-22
Oct-20
Oct-19
Apr-21
Apr-22
Apr-20
Apr-23
Apr-19
Jul-22
Jul-20
Jul-19
Jan-21
Jan-22
Jan-20
Jul-21
Jan-23
Jan-19
0%
Oct-21
Oct-22
Apr-20
Oct-20
Apr-23
Oct-19
Apr-21
Apr-22
Jul-21
Apr-19
Jul-22
Jul-20
Jul-19
Jan-21
Jan-22
Jan-20
Jan-23
Jan-19
-5%
Source: Financial Services Authority (OJK)

Banking Risk Profile and Profitability 123
The banking industry has ample liquidity, robust capitalization, and manageable credit risk. Profitability is
consistently maintained at a steady level.
The banking NPL ratio continued to further decline to 2.53% gross and The banking sector's Capital Adequacy Ratio (CAR) was steady with a value of
0.78% net as of April 2023, significantly below the threshold. 24.57% and Tier-1 capital stood at 23.04% as of April 2023.
% %
5 NPL Net NPL Gross CAR Tier 1 24,57
25
4
3 2,53 20
23,04
2
0,78 15
1
0
Oct-2 1
Oct-2 0
Apr-2 2
Oct-2 2
Apr-2 1
Apr-2 3
Apr-2 0
Apr-19
Oct-19
Jan-20
Jan-22
Jan-21
Jan-23
Jul-22
Jul-21
Jan-19
Jul-20
10
Jul-19
Oct-2 2
Apr-2 1
Oct-2 1
Apr-2 3
Apr-2 0
Oct-2 0
Oct-19
Apr-2 2
Apr-19
Jan-22
Jan-21
Jan-23
Jan-20
Jul-21
Jul-20
Jul-22
Jan-19
Jul-19
Liquid Assets to Non-Core Deposits and Liquid Assets to Third-Party Funds The banking industry's Net Interest Margin and Return on Assets
(Total Deposits) remained well above the thresholds. remained steady at 4.77% and 2.72%, respectively, as of April 2023.
%
Liquid Assets/Non-Core Deposit (LA/NCD) 6
% % Net Interest Margin Return on Assets 4,77
180 Liquid Assets/Third-Party Fund (LA/TPF) (rhs) 40
160 26,58 35 4
140 30 2,72
12 0
25
118,25 20 2
100
threshold LA to TPF (rhs) = 10% 15
80 10
60 threshold LA/ NCD= 50% 5 0
Oct-2 2
Apr-2 1
Oct-2 1
Apr-2 3
Apr-2 0
Oct-2 0
Oct-19
Apr-2 2
Apr-19
Jan-22
Jan-21
Jan-23
Jan-20
Jul-21
Jul-20
Jul-22
Jan-19
Jul-19
40 0
Jan -19 Apr-19 Ju l-19 Oct-19 Jan -20 Apr-20 Ju l-20 Oct-20 Jan -21 Apr-21 Ju l-21 Oct-21 Jan -22 Apr-22 Ju l-22 Oct-22 Jan -23 Apr-23
Net Open Position was maintained well below the maximum limit of 20%
and stood at 1.60% in April 2023.
%
5
4
3
2 1,6
*) provisional figures due to the relaxation on financial
institutions’ report to OJK because of Covid-19 1
0
Oct-2 1
Oct-2 0
Apr-2 2
Oct-2 2
Apr-2 1
Apr-2 3
Apr-2 0
Apr-19
Oct-19
Jan-20
Jan-22
Jan-21
Jan-23
Jul-22
Jul-21
Jan-19
Jul-20
Jul-19

Multi-finance Companies 124
The performance of multi-finance companies continues to improve, as shown by growing financing, a
manageable Non-Performing Financing (NPF) ratio, and a stable gearing ratio.
The Non-Performing Financing ratio of multi-finance companies

In April 2023, net financing continued its increasing trend and stood at
remained manageable at 2.47% in April 2023, well below the 5%
IDR438.8 Tn or growing by 15.13% yoy.
threshold.*)
%
IDR tn YoY
Net Financing Growth (rhs) 15,13% 6
500 15%
438,8
10% 5
400 4
5%
300 0% 3 2,47
-5%
200 2
-10%
100 1
-15%
0
0 -20%
Oct-20
Oct-21
Apr-22
Oct-22
Apr-20
Apr-23
Apr-19
Oct-19
Apr-21
Jul-21
Jan-23
Jul-22
Jul-20
Jul-19
Jan-21
Jan-22
Jan-20
Jan-19
Oct-2 2
Oct-2 1
Oct-2 0
Apr-2 2
Apr-2 1
Apr-2 3
Apr-2 0
Apr-19
Oct-19
Jan-20
Jan-22
Jan-21
Jan-23
Jul-22
Jul-21
Jan-19
Jul-20
Jul-19
The gearing ratio of multi-finance companies stood at 2.17 times or Multi-finance companies’ exposure to domestic debt continued to
well below the threshold in April 2023. increase whereas exposure to foreign debt experienced a declining
trend in April 2023. *)
4 IDR Trillion Domestic Debt Foreign D ebt
250 213,78
3
2,17 200
2
150
1
100
56,39
0 50
Oct-22
Oct-20
Apr-21
Oct-21
Apr-22
Apr-20
Apr-23
Apr-19
Oct-19
Jul-21
Jan-23
Jul-22
Jul-20
Jul-19
Jan-21
Jan-22
Jan-20
Jan-19
Oct-2 2
Oct-2 1
*) provisional figures due to the relaxation on financial institutions’ report to OJK because of Covid-19
Oct-2 0
Apr-2 2
Apr-2 1
Apr-2 3
Apr-2 0
Apr-19
Oct-19
Jan-20
Jan-22
Jan-21
Jan-23
Jul-22
Jul-21
Jan-19
Jul-20
Jul-19

Insurance and Pension Funds 125
Insurance and pension funds continue to improve, shown by adequate performance and manageable risks.
In April 2023, insurance premiums marked a total increase of IDR25.20 In April 2023, the Investment Adequacy Ratio of both Life Insurance and
Tn (mtm) with General and Life insurance added premiums at IDR10.49 General Insurance stayed well above the threshold at 130.3% and
Tn and IDR14.71 Tn, respectively. 194.66%, respectively.
%
IDR Tn
General insurance Life insurance 240 Life Insurance General Insurance

40
220 194,66
35 200
30 180
160
25 140 130,3
20 120
14,71 100
15 threshold Investment Adequacy Ratio= 100%
80
10 60
5 10,49 40
20
0 0
Jul-19
Jul-20
Jul-21
Jul-22
Oct-19
Oct-20
Oct-21
Oct-22
Jan-19
Jan-20
Jan-21
Jan-22
Jan-23
Oct-21
Apr-19
Apr-20
Apr-21
Apr-22
Apr-23
Oct-22
Oct-20
Oct-19
Apr-21
Apr-22
Apr-20
Apr-23
Apr-19
Jul-22
Jul-20
Jul-19
Jan-21
Jan-22
Jan-20
Jul-21
Jan-23
Jan-19
Risk-Based Capital (RBC) of the insurance industry remained well above In April 2023, pension fund and insurance investment values continued the
the minimum threshold with Life Insurance at 457.79% and General upward trend and stood at IDR341.3 Tn and IDR1,468.1 Tn, respectively.
Insurance at 311.16% in April 2023.
% Life Insurance (Lhs) General Insurance (rhs) % IDR Tn IDR Tn

Insurance Pension Funds (rhs)
900 400 1468,1
800 311,16 350 1.500 400
700 300 1.200 341,3
600 350
457,79 250
500 900
200 300
400
threshold Insurance RBC (rhs)= 120% 150 600
300
200 100 250
threshold Insurance RBC (Lhs)= 120% 300
100 50
0 0 0 200
Oct-2 0
Oct-2 2
Apr-2 1
Oct-2 1
Apr-2 3
Apr-2 0
Oct-19
Apr-2 2
Apr-19
Jan-22
Jan-21
Jan-23
Jan-20
Jul-21
Jul-20
Jul-22
Jan-19
Jul-19
Oct-21
Apr-22
Oct-22
Apr-20
Oct-20
Apr-23
Apr-19
Oct-19
Apr-21
Jul-21
Jul-22
Jul-20
Jul-19
Jan-21
Jan-22
Jan-20
Jan-23
Jan-19

Domestic Capital Market Performance 126
Indonesia’s capital market continued to maintain its stability despite global challenges
Global stocks rallied supported by the Fed’s “Hawkish Hold” sentiment. The domestic capital market showed a mixed performance with composite
However, most emerging markets fell into the negative territory. bond maintained its positive trend since the beginning of the year.
Stock Index Performance as of 13 June 2023 (compared to 30 Dec’22) 8000 400

US Comp Stock Index (rhs) Comp Bond Index
36,21% 7500 380
JPN 26,53%
7000 360
S KOR 17,96%
WORLD 11,82% 6500 340
EU 9,32% 6000 320
BRAZ 6,39%
CHIN 5500 300
4,67%
PHIL -0,90% 5000 280
HKN -1,31% 4500 260
TURK -1,45%
SIN 4000 240
-1,90%
INDO -1,92% (% YTD) 3500 220
As of 13 June, 2023
THAI -6,37%
3000 200
MAL-7,68%
Dec-19
Dec-20
Dec-21
Dec-22
Mar-20
Mar-21
Mar-22
Mar-23
Sep-19
Sep-20
Sep-21
Sep-22
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
-10% 0% 10% 20% 30% 40%
Government bond yields remained competitive, followed by a stable The Net Asset Value (NAV) of equity mutual funds was stable with low
rupiah as the risk premium was maintained. volatility, reflecting a steady movement in the capital market.
IDR Tn NAV Eq uity Mutual Fund s JCI (rhs)

Yield (%) 5-yr Yield 10-yr Yield USD/IDR
700 8.000
10 20-yr Yield IDR (rhs)
18.000 600 7.000
9 6.000
500
14.000 5.000
8 400
4.000
10.000 300
7 3.000
200
6.000 2.000
6
100 As of 6 June, 2023 1.000
As of 13 June, 2023
5 2.000 0 0
Mar-20
Mar-21
Mar-22
Mar-23
Dec-19
Dec-20
Dec-21
Dec-22
Sep-19
Sep-20
Sep-21
Sep-22
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Dec-20
Dec-21
Dec-22
Mar-21
Mar-22
Mar-23
Sep-20
Sep-21
Sep-22
Jun-20
Jun-21
Jun-22
Jun-23
Source: Reuters, Financial Services Authority (OJK)
Domestic Capital Market Performance 127
Several capital market indicators recorded positive performance and remained stable.
Non-resident portfolios of government bonds recorded a YTD net buy

Total securities issuance reached IDR106.85 Tn (YTD) as of 13 June
of IDR89.33 Tn (YTD)*, while equity market recorded a YTD net buy
2023.
of IDR19.60 Tn**.
IDR Tn
Gov't Debt Securities Equity IDR Tn IPO Rights Issue Corporate Bond & Sukuk
60
220
40
200 As of 13 June, 2023
20
180
0 160 156,33
-2 0 140
-4 0 120
-6 0 100 78,37 43,3
*As of 9 June, 2023
-8 0 80 33,03
**As of 13 June, 2023 30,85
-1 00 60
-1 20 40 32,7
-1 40 20
0
Mar-20
Mar-21
Mar-22
Mar-23
Dec-19
Dec-20
Dec-21
Dec-22
Sep-19
Sep-20
Sep-21
Sep-22
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
2016 2017 2018 2019 2020 2021 2022 2023*
Capital Market Investors continued to grow to 11.06 million by the end of

May 2023, representing a 24.86% (yoy) increase.
12 11,06
Total Investor 10,31
10 (million)
6
3,88
4
2,48
2 1,62
1,12
0
2017 Sep-21 Feb-22 Jul-22 Dec-22 May-23
Source: Financial Services Authority (OJK), KSEI
Fintech (Peer to Peer Lending and Securities Crowdfunding) 128
Peer to Peer Lending (P2PL) Fintech intermediation grows with a manageable NPL ratio and Securities
Crowdfunding fundraising continues to rise.
The outstanding loan of P2PL Fintech remained steady and stood at The Non-Performing Loan ratio of P2PL Fintech remained manageable at
IDR50.53 Tn or grew by 30.63% (yoy) as of April 2023. 2.82% in April 2023.
YoY Peer to Peer NPL Ratio

IDR Tn 10%
60 Outstanding Loan Growth 200%
50,53
50 150% 8%
40 100% 6%
30,63%
30 50% 2,82%
4%
20 0%
2%
10 -50%
0%
0 -100%
Jul-21
May-21
Jan-23
Jul-22
Jul-20
Mar-21
May-22
May-20
Sep-21
Mar-22
Mar-20
Nov-20
Jan-21
Sep-22
Mar-23
Sep-20
Jan-22
Jan-20
Nov-21
Nov-22
Oct-2 1
Oct-2 0
Apr-2 2
Oct-2 2
Apr-2 1
Apr-2 3
Apr-2 0
Oct-19
Apr-19
Jan-22
Jan-21
Jan-23
Jul-22
Jan-20
Jul-21
Jan-19
Jul-20
Jul-19
The total number of investors and issuers in Securities Crowdfunding Continuing the positive trend, the total value of SCF fundraising stood at
increased to 153,662 and 404, respectively, as of 31 May 2023. IDR869.47 billion as of 31 May 2023.
IDR Bn Total Fund raising

Number of Investors Number of Issuers
*As of 31 May 2023 1.000 *As of 31 May 2023

180.000 869,47
900
160.000 153.662 735,76
800
140.000 700
120.000 127.810
600
100.000 93.777 500 413,19
80.000 400
51.414 404 300
60.000 340 184,90
195 200
40.000 1.380 5.063 64,15
127 100 6,47
20.000 14 49 0
0 2018 2019 2020 2021 2022 2023
2018 2019 2020 2021 2022 2023
OJK Policy Directions 2023
to increase bank lending to support the national economic recovery, while maintaining financial
system stability
Strengthening the Financial Improving Services and

Services Sector Strengthening OJK’s Capacity
• Strengthening capital and consolidation in the
banking sector Maintaining Economic
• Enhancing Financial Information Services
• Enhancing product and service innovations Growth System (SLIK) to create a level playing field
• Strengthening governance and integrated
supervision • Increasing investors’ interest in green and • Expediting single window licensing
• Restoring public trust in the insurance industry • Facilitating coordination among the financial
sustainable instruments as well as Shari’a
services industry, authorities, and other
• Implementation of Statements of Financial investmeants
relevant institutions
Accounting Standards (PSAK) 74 • Enhancing the attractiveness of domestic
• Strengthening the role of actuaries financial market • Strengthening integrity and professionalism
• Funding source diversification in the multi-finance • Supporting the Government’s strategic policies • Implementing Anti-Bribery Management
industry System (SMAP)
and programs
• Harmonizing rules with international
• Massive education programs to enhance financial • Enhancing financial access for MSMEs
standards
literacy
• Strengthening complaint handling and dispute • Integrated data and information management
resolution as well as civil lawsuits by OJK • Development of SupTech and RegTech
In consumer protection, OJK will focus on creating swift and just resolutions for financial consumers, imposing still financial penalties to create deterrent
effects on violators, eradicating illegal investments, and establishing service centers to channel consumer complaints at all OJK offices across Indonesia.
In the implementation of Financial Sector Omnibus Law (P2SK Law), OJK hopes for stakeholders’ active participation in the P2SK Law implementation process, including
synergy with relevant authorities and institutions during the regulatory and supervisory transition process. Other important measures include Shari’a financial sector
landscape restructuring through spin-offs and banking consolidation, preparing for the implementation of the Insurance Policy Holder Protection Program, strengthening
market conduct supervision, and gradually extending activities and financial products to encompass areas, such as carbon exchanges, bullion activities, digital and crypto
assets.
Source: Bank Indonesia
Source: Financial Services Authority (OJK) 129
OJK Policy Directions 2023
Extended Loans and Financing Restructuring Policy
As global economic uncertainties remain high and economic sectors face different impacts due to the scarring effect
of the Covid-19 pandemic, OJK extended the loans/financing restructuring policy until 31 March 2024 to targeted
sectors as follows:
Targeted Segments of Covid-19 Restructured Loan
MSME segment (covering all Accommodation and food Labor-intensive industries, such as
sectors) service activities textile and textile products and
footwear industries

Act No. 4/2023 – Financial Sector Reform
FUNDAMENTAL ISSUES EXTERNAL CHALLENGES

• Short-term financing is still dominated by Banks
Technology Disruptions
• Small non-bank asset portion should be enlarged to finance development
• Limited financial instruments – huge potential for market deepening
• Digital assets: high risk and complex financial instruments New financial risks from climate change and
• Weak governance and law enforcement in the financial sector current geopolitical situation
OBJECTIVE : Optimizing financial intermediation and financing portfolio for productive sectors; improving financial access, inclusion and literacy, and
consumer protection; expanding long-term financing resources; enhancing competitiveness and efficiency of the financial sector; and strengthening the
authorities and responsibilities of financial regulators.
OTORITAS JASA KEUANGAN BANK INDONESIA LEMBAGA PENJAMIN SIMPANAN KEMENTERIAN KEUANGAN
Indonesia Financial Services The Central Bank of The Republic of Indonesia Deposit Insurance The Ministry of Finance
Authority Indonesia Corporation
• Strengthening OJK’s role in some • Strengthening BI’s role in some • Strengthening the role of IDIC in • Strengthening the role of the
areas, including integrated areas, such as maintaining deposit guarantee and bank Ministry of Finance as a
supervision, financial financial system stability to resolution. coordinator for Financial System
conglomerate supervision, support sustainable economic • Giving a new mandate: IDIC Stability Committee and
market conduct supervision, growth, maintaining the smooth establishes policies and Sustainable Finance committee.
consumer protection, etc. running of the payment system, implement the insurance policy • The MoF coordinates with OJK,
• Giving new mandates among implementing macroprudential guarantee program. BI, and IDIC in some areas,
others: cooperative in the policies. including financial literacy and
financial sector, digital assets, inclusion, financial sector
carbon exchange, bullion development, etc.
activities.

Act No. 4/2023 - Substances
Act No. 4/2023 modifies, removes, and/or establishes new provisions for 17 existing laws in the financial sector and repeals one law. The Act also introduces new
provisions regarding a) Financing Service Business, b) Consumer Protection in the Financial Sector, c) Technological Innovation in the Financial Sector, d) Human Resources,
e) Financial Reporting, and f) Mutual Insurance.
CHAPTER I General Provisions CHAPTER XV Financial Conglomerate
CHAPTER II. Principles, Purposes, Objectives and Scope CHAPTER XVI Financial Sector Technology Innovation
CHAPTER III Institutional Aspect CHAPTER XVII Sustainable Finance Implementation

CHAPTER IV Bank CHAPTER XVIII Financial Literacy, Financial Inclusion and Consumer
Protection
CHAPTER V Capital Market, Money Market and Foreign Exchange Market
CHAPTER XIX Access to Micro, Small, and Medium Financing
CHAPTER VI Insurance
CHAPTER XX Human Resources
CHAPTER VII Mutual Insurance
CHAPTER XXI Financial System Stability
CHAPTER VIII Policy Guarantee Program
CHAPTER XXII Indonesia’s Export Financing Institutions
CHAPTER IX Guarantee Agencies
CHAPTER XXIII Administrative Sanction
CHAPTER X Financing Service Business
CHAPTER XXIV Criminal Provisions
CHAPTER XI Bullion Business Activity
CHAPTER XXV Other Provisions
CHAPTER XII Pension Fund, Old Age Protection Program, and Pension
Program CHAPTER XXVI Transition Provisions
CHAPTER XIII Cooperative in the Financial Services Sector CHAPTER XXVII Closing Provisions
CHAPTER XIV Microfinance Institution

Macroprudential Policy remains accommodative in 2023
to increase bank lending to support the national economic recovery, while maintaining financial
system stability

Bank Indonesia’s Comprehensive Financial Deepening Program
Strengthening the Effectiveness of Monetary Policy Operations and Transmission, integrated
with the modern and efficient money market to support the financing of the economy

Bank Indonesia’s Continue to Expand Payment System Digitalization in 2023
..to accelerate payment system digitalization for further integration in the national economic-financial digital
ecosystem, developing Digital Rupiah, as well as expanding cross-border payment system cooperation.

Jakarta - Special Capital District of Indonesia
www.indonesia.travel 136

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Republic of Indonesia

Strengthening Policy Synergy to Maintain Stability while

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What’s New Prudent Pandemic Management

Affirmation of Investment Grade

Accelerated Reforms Agenda Supported by Fiscal Performance and Flexibility:

Economic Factor: Monetary and Financial Factor:

Indonesia's Exit Strategy

Source: Coordinating Ministry for Economic Affairs 5

PEN 2021 BUDGET

Source: Coordinating Ministry for Economic Affairs 6

PERPPU No 1 of 2020 provides responsible discretion. During the COVID-19 pandemic

3 Data availability & quality are important in formulating policies.

Intensive coordination between the Central Government, Regional Governments and

Source: Coordinating Ministry for Economic Affairs 7

1. PPKM was officially revoked on Friday, 30 December 2022;

The Direction of the National Economic Recovery Policy for 2023:

16.425.420 Total Beneficiaries (Batch 1-47) B. Acceleration of Financial Inclusion

Rp37,96 trillion Incentive fund disbursement

C. Improved Purchasing Power and SMES

STRENGTHENING THE MSME ECOSYSTEM STRENGTHENING E-COMMERCE ECOSYSTEMS

During the pandemic, MSMEs used various marketplace

Source: Kominfo, 2021.

8 out of 10 Get help during the pandemic

Source: Coordinating Ministry for Economic Affairs 14

TAX HOLIDAY & INVESTMENT

• The criteria are new investment, • To encourage investment in

December 2022, Rating Affirmed at BBB/Stable

“Indonesia's rating balances a favourable medium-term

April 2022, Outlook Revised To Stable; BBB Ratings Affirmed

March 2023, Rating Affirmed at Baa2/Stable

BBB+ / Stable BBB+ / Stable

INDONESIA 5 GOLD VISION 8 17 45 MAIN

First Phase FOUNDATION OF TRANSFORMATION

Source: Preliminary Draft RPJPN 2025-2045, May 19 2023 18

First Phase Downstream natural resources and

Third Phase Economic power house that is integrated with

Source: Preliminary Draft RPJPN 2025-2045, May 19 2023 20

RPJMN 2020-2024 23.199

5,2% 6,0% 6,2% 5,9% 5,6% 5,4% Average Growth

2015 2020 2025 2030 2035 2040 2045

PRE COVID POST

(Accelerate) Accelerating (Create) Creating diverse and (Encourage) Encouraging cross-

Source: Coordinating Ministry for Economic Affairs 22

New Business New Job

Source: Coordinating Ministry for Economic Affairs 23

Streamlining Administrative Procedures and a Positive Investment Climate

PERPPU 2 of 2022 454,0

Government Revision of the licensing procedures 7,07

Employment Regulation Halal Product Assurance (Halal Management of Water

Further provisions regarding investment requirements are regulated in a

Pres. Regulation 44/2016 Pres. Regulation 10/2021 Jo. 49/2021

Business Fields and 10/2021)

• In principle, all business fields are open to investment, except for

Presidential Regulation No. 10/2021 Jo.

Sector Industry Sector Industry

Export Oriented EV Battery,

1 Encouraging Collaboration of Local Entrepreneurs with Foreign Investors

3 Providing easy incentives based on investor needs

Source: Ministry of Investment (BKPM) 33

Source: Ministry of Investment (BKPM) 34

Constitutional Court Decision Follow-up Emergency Regulation Promulgation of the Job

• PP Number 5 of 2021 concerning the Implementation of Risk-Based Business Licensing

Source: Coordinating Ministry of Economics Source: INA, as of May 30, 2023