{"id":5615,"date":"2025-07-11T02:13:40","date_gmt":"2025-07-11T02:13:40","guid":{"rendered":"https:\/\/himdasun.or.id\/?p=5615"},"modified":"2025-07-11T02:13:42","modified_gmt":"2025-07-11T02:13:42","slug":"macro-trip-key-takeaways-from-the-meeting-with-ministry-of-finance","status":"publish","type":"post","link":"https:\/\/himdasun.or.id\/en\/2025\/07\/11\/macro-trip-key-takeaways-from-the-meeting-with-ministry-of-finance\/","title":{"rendered":"Macro Trip: Key Takeaways from the Meeting with Ministry of Finance"},"content":{"rendered":"<p>We recently discussed fiscal policy with senior officials from the Directorate Economic and Fiscal Strategy and Directorate General Taxes.&nbsp;<strong>Here are the key takeaways:<\/strong><\/p>\n\n\n\n<p><strong>More stimulus likely.<\/strong>&nbsp;Government spending surged by 85.5% m-o-m in June or 54.2% y-o-y. The MoF explained that the main drivers were stimulus disbursement, subsidy compensation payments to Pertamina and PLN (for Q4 2024 subsidies), and the impact of budget unlocking for ministries. The MoF now targets GDP growth of 4.7 5.0% in 2025 but is aiming for the upper bound of at least 5.0%. This is the main reason why new stimulus was disbursed starting in 2Q, and more stimulus is also likely given the still-weak economy. The cancellation of the electricity tariff discount was due to limited budget preparation time. As a result, it was diverted to existing stimulus programs such as direct cash transfers.<\/p>\n\n\n\n<p><strong>Budget unlocking.<\/strong>&nbsp;Budget unlocking continues, reaching IDR135tn of the total IDR256tn (only for ministries) that was previously cut and frozen. Of the total, about IDR48tn is redistributed to 23 restructured ministries and IDR86.9tn to 76 other ministries. There is no clarity on how much of the unlocked budget has been spent, but it varies across ministries, with total spending at 40% of target by June as guidance. The unlocking process will continue depending on requests from ministries. Meanwhile, the IDR50.6tn regional budget cut remains in place but will be released subject to local government requests.<\/p>\n\n\n\n<p><strong>The risk of budget underspending.<\/strong>&nbsp;The still-small realization of the free meal program only 4% of target poses a challenge to meet the year-end budget, even just to hit the baseline target of IDR71tn. The government also recently lowered the maximum free meal budget to IDR116tn from IDR171tn because of this. While the baseline free meal budget cannot be shifted to other spending and will likely become excess cash (SAL) for next year, the reserve portion implying IDR45tn (the gap to the max IDR116tn) can be used for other spending this year. As such, the MoF sees the risk of a lower-than-expected deficit of 2.8% of GDP, which was recently raised from the original 2.5%.<\/p>\n\n\n\n<p><strong>Next year s budget.<\/strong>&nbsp;The government is still drafting the 2026 budget, with submission scheduled for 16 August. Parliament recently approved the macro assumptions, including a 5.2-5.8% GDP growth target, which will be finalized after the release of 2Q actual data. The MoF remains committed to keeping the deficit below the 3% of GDP limit, targeting between 2.48-2.53%. The MoF also said there will be no massive budget cuts or reallocations like this year, but the usual &#8216;automatic adjustment&#8217; of 5% is still likely.<\/p>\n\n\n\n<p><strong>Financing plan.<\/strong>&nbsp;The MoF emphasized a shift in financing strategy, adopting a more front-loaded approach to support large-scale programs and hedge against external uncertainties. The transfer of responsibility for State Capital Injections (PMN) to Danantara awaits implementing rules and regulations following the SOE Law revision. For now, capital injections to SOEs will continue to come from the fiscal budget, particularly for those given special assignments.<\/p>\n\n\n\n<p><strong>Substantial improvement in the core tax system.<\/strong>&nbsp;Tax growth has picked up sharply following earlier disruptions in the rollout of the new core tax system. The MoF stated that the system has now reached 80% functionality, with old systems used only for revisions. Tax refunds remain high, partly due to the new collection system called TER. The e-commerce tax is not a new tax but a new collection mechanism, replacing the previous self-reporting model by online sellers. Going forward, with the appointment of a new Director General of Taxes, the MoF will focus on improving the core tax system to enhance compliance and simplify self-reporting.<\/p>","protected":false},"excerpt":{"rendered":"<p>We recently discussed fiscal policy with senior officials from the Directorate Economic and Fiscal Strategy and Directorate General Taxes.&nbsp;Here are [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[7],"tags":[],"class_list":["post-5615","post","type-post","status-publish","format-standard","hentry","category-market-research"],"_links":{"self":[{"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/posts\/5615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/comments?post=5615"}],"version-history":[{"count":1,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/posts\/5615\/revisions"}],"predecessor-version":[{"id":5616,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/posts\/5615\/revisions\/5616"}],"wp:attachment":[{"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/media?parent=5615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/categories?post=5615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/tags?post=5615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}