Regional Cash Transfer, Village Fund Reach Rp185 Trillion in Q1 2018

In the first quarter of 2018, the realization of State Expenditure in the State Budget (APBN) of 2018 reached Rp419.55 trillion, a 4.88 percent increase year on year compared to the figure in the same period last year.

“The realization of the State Expenditure includes Central Government Expenditure Rp233.95 trillion and Regional Transfer and Village Funds (TKDD) Rp185.60 trillion,” stated press release of the Directorate General of Budget Financing and Risk Management of the Ministry of Finance, Monday (14/6).

The TKDD, according to the press release, includes Rp10.28 trillion of Village Fund to support Cash Labor Intensive program and Rp1.69 trillion of Special Autonomy Fund.

Despite an increase in the realization of State Expenditure, deficit in the State Budget deficit was reduced from Rp103.8 trillion in first quarter of 2017 to Rp 85.8 trillion in first quarter of 2018 due to an increase in the state revenue and a careful, measurable, and efficient state budget financing.

The press release further explained that by the end of March 2018 the State Budget deficit was overcome through Rp148.22 trillion (net) debts financing, lower than the figure in the same period last year with Rp187.9 trillion. The Government’s debt until the end of March 2018 is also maintained at a safe level at a ratio of 29.78 percent to Gross Domestic Product (GDP) or Rp4,136.39 trillion.

“Maintaining debt-to-GDP ratio is an implication of a front loading debt financing strategy in anticipation of global uncertainties, including changes in developed countries’ trade policies, escalating global geopolitical crises, and US Fed Fund Rate increase,” the press release said.

In the meantime, the average cost of the Government’s new debt in the first quarter of this year is 4.89 percent with the ratio of interest payments to debt is 1.66 percent, a drop compared to that in the first quarter of 2017 at 5.39 percent and 1.78 percent respectively.

The reduction in debt cost amid the upward trend in the Fed Fund Rate is the result of improvement economic fundamentals and Indonesia’s credit rating which last week gained a notch above the lowest Moody’s investment grade, following Standard & Poor’s and Fitch’s earlier credit rating improvement, the press release concluded.  (Humas Kemenkeu/ES) (RI/EP/Naster)