Indonesia prioritises spending for green economy transformation

Indonesia's state expenditures in the 2024 State Budget will be used to support the acceleration of a green economy, according to Finance Minister Sri Mulyani Indrawati.

State spending in 2024 is also aimed at completing priority infrastructure to accelerate green economic transformation and support bureaucratic and state apparatus reform, Indrawati told reporters on November 29, adding that State expenditure in the 2024 State Budget is up 8.6% compared to that of 2023.

She said that the 2024 State Budget makes utmost efforts to fulfil all national development priority programmes starting from protecting the people, including vulnerable groups, restoring the economy, encouraging transformation, developing all corners of the region, and also improving defence and security.

According to Indrawati, the 2024 State Budget was prepared with the assumption of optimistic macro indicators but remaining alert to the rapidly changing dynamics.

The basic macro assumptions in the 2024 State Budget comprise the economic growth of 5.2%, controlled inflation of 2.8%, exchange rate at 15,000 IDR per US dollar and interest rate on 10-year Government Securities (SBN) of 6.7%.

However, she said, assumptions from economic indicators in 2024 will still be influenced by developments in the global economy. It is necessary for the government to harmonise the State Budget and Regional Budget as well as anticipate uncertainty, thereby necessitating automatic adjustment, she added.

Earlier, Coordinating Minister for Economic Affairs Airlangga Hartarto assessed that the State Budget also prioritised projects to overcome climate change and encourage climate-friendly activities. To this end, the government implements a Climate Budget Tagging mechanism at the national and regional levels that is able to track climate change budget allocations as well as updated data on activities and results. Indonesia is implementing climate change resillence programmes to realise its vision of achieving net zero emissions by 2060./.

VNA