Indonesia plans to raise its budget by up to 13.6% next year as President Joko Widodo orders his cabinet to speed up the completion of strategic projects, including the construction of a new capital city, the finance minister said on Thursday.
The Southeast Asian nation will spend up to 3,476.2 trillion rupiah ($232.69 billion) next year, with government revenue seen at up to 2,865.3 trillion rupiah, Sri Mulyani Indrawati told a meeting with government officials.
Next year is the president's final year in office.
The budget deficit would be within a range of 2.16% to 2.64% of gross domestic product (GDP), below 2023's target of 2.84% of GDP.
Sri Mulyani said other than the construction of the new capital city called Nusantara on Borneo island, the government's priority spending would be on the elections and measures to eradicate extreme poverty.
"The president has ordered that we must complete the priority projects. There should not be new initiatives that can have an impact so that (old) programmes or projects will be incomplete," she said.
Indonesia plans to start moving 16,000 civil servants, and military and police officers next year to Nusantara.
Sri Mulyani reiterated that the government is targetting 2024 economic growth in a range of 5.3% to 5.7%, compared with this year's outlook of between 5% to 5.3%.
The budget would also assume inflation at 1.5% to 3.5%, the rupiah trading within a range of 14,800 to 15,400 per dollar and 10-year bond yields averaging between 6.5% to 7.4% next year.
Indonesia's March inflation rate was 4.97% and officials expect further easing later in the year.
The rupiah, which has strengthened more than 2% since late March amid expectations of a less hawkish U.S. Federal Reserve, traded at 14,920 a dollar on Thursday, while the 10-year bond yield was at 6.687%.
Meanwhile, Indonesia is expected to see oil lifting at 592,000 to 651,000 barrels per day and gas lifting at 1.007 million to 1.058 million barrels of oil equivalent per day in 2024, below this year's projections. ($1 = 14,939.0000 rupiah) (Reporting by Stefanno Sulaiman Editing by Ed Davies)