Indonesia’s Draft State Budget 2022 Postpones Economy Recovery Targets Compared to 2021 Budget Predictions

Media reports state that Indonesia’s economic growth levels will reach pre-pandemic levels only in 2022, a delay from the targets set out in the 2021 State Budget. This was stated in the 2022 draft State Budget, that was discussed by Sri Mulyani Indrawati, Indonesia’s Finance Minister, at a virtual press conference held on the 16th of August 2021. The Government of Indonesia has forecast gross domestic product (GDP) to increase 5.5% in 2022, driven by reforms set in motion, partly led by the Job Creation Law.

Why it Matters?

Although the 2022 draft State Budget presumes that certain key macroeconomic indicators such as GDP growth, inflation rate and Indonesia’s poverty rate will return to pre-pandemic levels by 2022, downside risks lo...