Ministry of Finance, Indonesia

The views expressed in this presentation are the views of the author and do not necessarily reflect the
views or policies
of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the
governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no
responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official
terms.
Republic)of)Indonesia
Suahasil Nazara
Chairman&of&Fiscal&Policy&Agency&
Ministry&of&Finance
Tokyo,&&20)21&August&2018
Outline
1. Current Economic Development
2. The 2018 Budget Performance
3. Fiscal Policy and the 2019 Budget
4. Policy for Sustainable Development

1.)Current)Economic)Development
Global)Economy)Experiences)Recovery)Since)2017,)but)Risk)is)Still)High
The)normalization) of)monetary)policy)adopted)by)the)US)carries) the)risk)of)reversing) capital)flows)to)the)
US)and)strengthening)the)dollar
Quarterly2US2Growth2(%2yoy) • The$global$economy$has$
Projection of Global2Growth improved$with$the$US$
(%,2yoy) 4 being$one$of$the$main$
3.5 motors
7
3 2.8
• Improved$US$economy!
6
2.5 normalization$of$monetary$
5.3 5.3 2 policy! increases$in$$on$
1.5 capital$! reversals$ to$the$
5 US$! strengthening$of$
5.1 1
4.9 the$US$dollar.
3.9 3.9 0.5
4
0 • Some$risks$ and$challenges$
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 for$the$global$economy$in$
3 2011 2012 2013 2014 2015 2016 2017 2018 the$future:
2.4
2.2 • Financial$market$
Dollar2Index pressure$ due$to$US$
2
monetary$normalization
96
• China$moderation
1 95
• Protectionism
94
• USBChina$Trade$War$
93
0
92 • Geopolitical$tension
2011 2012 2013 2014 2015 2016 2017 2018p 2019p
91 • Climate$change$/$
Dunia Developed6countries
Negara6Maju 90 extreme$ weather
Global
89
Negara6Berkembang
Developing6countries ASEAN@5
88
Dec@17 Jan@18 Feb@18 Mar@18 Apr@18 May@18 Jun@18 Jul@18 Aug@18
Global)Turmoil)Affecting)Domestic)Economy,)especially)in)Financial)
Market)Volatility
Financial)sector)turmoil... …)in)the)midst)of)high)national)production)needs
Exchange) Rate) Rupiah/US$
as$of$16$August$2018 30% Total)Export)Import 24.48% 19
20%
11.35% 14
10%
Pertumbuhan
Miliar)USD
Billion)USD
9
Growth
0%
)10% 4
)20%
)1
)30%
Export$ Import$
Average$Exchange$ Rate$(ytd)
)40%
Nilai$Eks
Export$Value Eks$ytd
(ytd) Impor$ytd
(ytd)
)6
)50% )11
F
M
F
M
M
O
O
N
D
J
J
N
D
J
J
A
S
A
S
A
2017)J
2018)J
Balance$of$Payment
• The$balance$of$payments$ in$Q2B2018$recorded$a$
deficit$of$US$$$4.3$billion
• The$capital$and$financial$account$(TMF)$ surplus$in$
Stocks
Govt
Bonds this$period$amounted$to$US$$$4.0$billion,$while$the$
current$account$deficit$(TB)$was$US$$$8.0$billion$
(3.0%$to$GDP)
Indonesia)GDP)Growth)at)5.27%)in)Q2[2018
Strong)investment) and)stable)consumption)support)growth
5.50
GDP)Growth)(%,)YoY)
• Consumption and investment
PDB&(%,yoy) Tahunan&(%)
Quarterly Yearly remain the main engines of
5.274
5.21 5.07 5.19 growth
5.00 5.02
5.03 5.01 5.01 5.06 5.064
4.94 4.94 • Investment contribution increases
underpinning more productive
4.50 economic activity
• International trade performance is
robust as export grew at 7.70%
4.00 and import grew at 15.17%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018
GDP2Breakdown2by2 2016 2017 2018

Expenditure2(%,2YoY)
Q1 Q2 Q3 Q4 Y Q1 Q2 Q3 Q4 Y Q1 Q2
Household2Consumption 4.98 5.10 5.04 5.03 5.04 5.00 5.02 4.95 4.98 4.98 5.01 5.22
Government2Consumption 3.43 6.21 (2.95) (4.03) (0.14) 2.69 (1.92) 3.48 3.81 2.14 2.74 5.26
Gross2Fixed2Capital2Formation 4.67 4.18 4.24 4.79 4.47 4.77 5.34 7.08 7.27 6.15 7.95 5.87
Export (3.10) (1.50) (5.75) 4.15 (1.57) 8.41 2.80 17.01 8.50 9.09 6.09 7.70
Import (5.04) (3.47) (4.13) 2.72 (2.45) 4.81 0.20 15.46 11.81 8.06 12.66 15.17
GDP 4.94 5.21 5.03 4.94 5.03 5.01 5.01 5.06 5.19 5.07 5.06 5.27
FISCAL'POLICY'AGENCY
MINISTRY(OF(FINANCE(OF(THE(REPUBLIC(OF(INDONESIA 6
GDP)Growth)from)Production)Side
Long)holiday)in)June)2018)pushed)demand)in)certain)sectors:)manufacturing) industry,)trade,)and)
transportation
GDP)Growth by)Sector 2016 2017 2018

(%,)YoY) Q1 Q2 H1 Q3 Q4 Y Q1 Q2 H1 Q3 Q4 Y Q1 Q2 H1
Primary)Sector 1,37 2,56 1,98 2,07 3,72 2,40 3,75 2,81 3,27 2,43 1,32 2,59 2,30 3,81 3,08
Agriculture,$Forestry, and$Fishery 1,47 3,48 2,53 3,18 5,53 3,36 7,15 3,23 5,07 2,77 2,24 3,81 3,29 4,76 4,05
Mining$and$Quarrying 1,22 1,04 1,13 0,17 1,35 0,95 B1,22 2,12 0,43 1,84 0,08 0,69 0,74 2,21 1,47
Secondary)Sector 5,39 4,82 5,10 4,63 3,57 4,58 4,69 4,32 4,50 5,50 5,26 4,95 5,36 4,61 4,98
Manufacture 4,68 4,62 4,65 4,47 3,28 4,26 4,28 3,50 3,88 4,85 4,46 4,27 4,56 3,97 4,26
Electricity, Gas,$and$Water 7,35 6,09 6,70 4,69 3,11 5,26 1,80 B2,09 B0,18 4,88 2,50 1,76 3,33 7,29 5,30
Construction 6,76 5,12 5,93 4,95 4,21 5,22 5,96 6,94 6,45 6,98 7,23 6,79 7,35 5,73 6,53
Tertiary)Sector 6,02 6,34 6,18 5,48 4,85 5,66 5,58 5,21 5,39 5,89 6,01 5,68 5,90 5,81 5,85
Trade$and$Retail 4,31 4,28 4,30 3,66 3,87 4,03 4,61 3,47 4,03 5,20 4,47 4,44 4,93 5,24 5,09
Transportation$and$Warehouse 7,42 6,52 6,96 8,18 7,64 7,45 8,06 8,80 8,44 8,88 8,21 8,49 8,59 8,59 8,59
Information$and$Communication 7,58 9,31 8,46 8,93 9,62 8,88 10,48 11,06 10,78 8,82 8,99 9,81 8,52 6,06 7,26
Financial$Services$and$Insurance 9,32 13,60 11,44 9,04 4,18 8,90 5,99 5,94 5,97 6,16 3,85 5,48 4,33 3,02 3,67
Other$Services 5,87 5,52 5,69 4,52 3,84 4,91 4,28 3,90 4,09 4,80 6,31 4,85 5,62 6,18 5,90
GDP 4,94 5,21 5,08 5,03 4,94 5,03 5,01
5,01 5,01 5,06 5,19 5,07 5,06 5,27 5,17
" Agriculture Sector performance grew better mainly supported by more conducive
Tertiary sector remained demonstrating relatively
weather, led to the food and vegetables crops increase. Meanwhile, plantation and fishery high growth even though some experienced a
grew relatively stable. deceleration:
" Mining sector grew positively backed by improving production activity of metal " Transportation and Warehouse grew high in line
mineral and oil and gas mining that returned to positive growth, while coal mining had a with high demand of transportation services in Eid
declining production. Mubarak activities.
" Trade showed growth improvement in line with
" Manufacture sector grew higher yet limited, there was a push to production
increase to fulfill demand of Ramadan particularly in F&B industry, textile, footwear, retail and vehicle sales as well as export and import
rubber and transportation equipment` whereas on the other side other industries such as activities.
electronic and chemicalBpharmacy were relatively stagnant. " Financial services slowed because of suboptimal
credit distribution.
Spatial)Economic)Growth
All)regions)experienced) positive)economic)growth)in)Q2)2018
KALIMANTAN:48.05%4of4GDP
SULAWESI:46.20%4of4GDP
" All$regions$
2017:4 2018:
4.97 2017:4 experienced$ positive$
2017:4 2018: 3.31% 2018:
4.14 4.65% 6.93 6.75% growth$except$for$
Kalimantan$and$
Sulawesi
2017:4 2018:
4.40 18.18%
" Java$and$Sumatera$
SUMATERA:421.54% of4GDP grew$higher$due$to$
PAPUA:42.54%4of4GDP better$improvement$in$
secondary$and$tertiary$
2017:4 2018: sector
5.69 5.69% 2017:4 2018: " Eastern$Regions$of$
2.93 3.75%
Indonesia$experienced$
JAVA:458.61%4 of4GDP even$higher$growth$
BALI4&4NUSRA:43.06%4of4GDP due$to$bullish$mining$
sector
National4GDP4Growth 5.27%
The)Indonesian)Rupiah)Exchange)Rate
Stability)remains) preserved
Argentina 62%
Turkey 57%
Brazil 20%
17% " Volatility in global financial sector is still
Russia
2008$(15$
2018&(15&Agus) 2017 relatively high and could push further US
India 10% August)
Dollar appreciation
South&Africa 17%
" The Government and Bank Indonesia are
Indonesia 8%
closely watching the global developments
Philippines 7% and are continuing to optimize the
Korea 6% monetary and macro prudential policy
China 7% mix, as well as strengthen policy
EUR 6% coordination
Singapore 4%
Thailand 2%
Malaysia 2% Depreciation
Japan O2%
)15% )5% 5% 15% 25% 35% 45% 55% 65%
" The$Rupiah$exchange$rate$ stabilization$strategy$needs$ to$be$supported$by:
• Indonesia's$strong$economic$fundamentals$(controlled$inflation,$healthy$fiscal$deficits,$and$increased$debt$rating$and$Ease$ of$Doing$
Business)
• The$policy$of$stabilizing$the$Rupiah$value$is$measured$ in$accordance$with$the$economic$fundamentals$of$Bank$Indonesia$supported$
by$strong$foreign$exchange$reserves$
• Strengthening$policy$coordination$continues$in$order$to$improve$macroeconomic$stability,$including$coordination$of$supply$of$foreign$
exchange$supply$and$needs$among$SOEs
Inflation)Has)Been)More)Benign
...creates substantial) foundation)for)robust)consumption
• Inflation is more benign

Inflation4Rate4&4Components4(%) supported by more stable food
inflation as supply side
improves
CPI • The administered price
inflation is the biggest source
of pressure in 2017, t he
pressure is easing as tariffs a re
8.70% adjusted at the end of the first
semester of 2017
• Mana geable inflation in Festi ve
Period for the last 3 years
5.92% • Good coordination a mong BI,
5.36%
central and local governme nt
3.07% 3.61% to curb inflation
3.18%
3.02% 2.95% 2.87% Future)Policies
2.11% • Improving logistic, distribution,
and coordination betwee n
0.21% 0.71% institutions are some ke y
factors to manage inflation
• Monitoring the prices and
improving some food
commodities tra ding could
anticipate price game practices
CAD)and)the)Related)Policy)to)Control)
• In Q2 2018 CAD widen to 3% of GDP • The policies taken include:
influenced by the high demand for non)oil • Encourage the use of biodiesel fuel with a
and gas imports along with the increase in content of 20% from CPO (B20)
consumption and productive activities, the • Increase the use of local content
increase in oil prices, and high international • Alternative domestic products on imported
trade activities. consumption products
• Despite the widening, the CAD in Q2 2018 is • Encourage the growth of the tourism sector
still lower than the pressure period due to the
• Selectively postpone infrastructure projects
Taper Tantrum ()4.24% in 2013 and )4.26 in
that are not growth sensitive
2014).
• The government continues to give priority to
• Indonesia's CAD widening can actually signal
a positive potential in the future, due to high efforts to improve the investment climate and
competitiveness for structural improvements
imports for productive activities such as
in current transactions and in order to
infrastructure development.
support growth
2012 2013 2014 2015 2016 2017 2018
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
CAD(%$of$GDP)
CAD)(%)thd)PDB) 21.40 23.5 22.24 23.46 22.61 24.24 23.71 22.05 22.33 24.26 23.01 22.71 22.02 21.96 21.96 22.2 22.14 22.41 22.03 20.75 20.89 21.86 21.76 22.34 22.15 23.0
GDP$Growth
Pertumbuhan)PDB)(%,)yoy) 6.11 6.21 5.94 5.87 5.54 5.59 5.52 5.58 5.12 4.94 4.93 5.05 4.83 4.74 4.78 5.15 4.94 5.21 5.03 4.94 5.01 5.01 5.06 5.19 5.06 5.27
Inflasi)akhir)tahun(%,)yoy)
Inflation$(%,$yoy) 4.3 8.38 8.36 3.35 3.02 3.61 3.18)(Juli)
Direct)Investment)Grew)by)3.2)Percent)in)Q2[2018
Political) climate) factors)and)exchange) rate)volatility)make)investors)take) wait)and)see
Direct)Investment)Realization " Capital realization in the second quarter of

2018 reached Rp.176.3 trillion or grew
Q1[2018 Q2[2018 1st H[2018 slowly to 3.2% (yoy).
Nominal) Growth) Nominal) Growth) Nominal) Growth) • Domestic investment is still growing
quite well, which is 32.1% higher than
(Rp Tn) (%)yoy) (Rp Tn) (%)yoy) (Rp Tn) (%)yoy) the same period the previous year.
Domestic 76.4 11.0 80.6 32.1 157.0 21.0 • Foreign investment realization growth
contracted by 12.9%.
Foreign 108.9 12.4 95.7 (12.9) 204.6 (1.1)
• Factors of exchange rate instability and
Total 185.3 11.8 176.3 3.2 361.6 7.4 the domestic political climate ahead of
the general elections made investors
take a wait and see attitude.
FDI)Share)by)Country)of)Origin) Direct)Investment)Share)by)
• Factors of global instability such as the
Q2[2018 Sectors)Q2[2018 trade war between America and China
also helped global investors tend to
Singapore
Singapura 33.5% Others,4 Mining,416.0% hold their investments.
39.0% • Investment in the mining sector is
Japan
Jepang 14.4% increasing, mainly in smelter
development projects.
" Asian countries are still the biggest
China
Tiongkok 9.4%
Transportation contributor to foreign investment in
,4Warehouse,4 Indonesia.
Hong& and4
Hong$Kong 9.4% • One third of foreign investment
Kong Telecommunic
Housing,4 ation,414.6% realization comes from Singapore.
Estate,4and4
Malaysia
Malaysia 5.3% Building,4 • There has been an increase in
Electricity
8.9% investment originating from China and
,4Gas,4and4
Water4 Malaysia.
Others
Lainnya 29.2% Crops4 and4
Plantation Supply,4
,49.8% 11.8%
2.)The)2018)Budget)Performance
Macroeconomic)Assumptions)2017[2018
2017 2018
Indicators Realization) Realization)

APBN[P APBN
until)31)July until)31)July
Economic)Growth)(%,)yoy) 5.2 5.01* 5.4 5.17*
Inflation)(%,)yoy) 4.3 3.9 3.5 3.2
3[month)Treasury)Bill)(%) 5.2 5.1 5.2 4.6
Exchange)Rate)(Rp/US$) 13,400 13,333 13,400 13,855
ICP)(US$/barel) 48 48 48 67
Oil)Production)(thousands)of)
815 793 800 771**
barrel/day)
Gas)Production)(thousands)of)
1,150 1,235 1,200 1,146**
barrel/day)
*$$$Until$the$1 st half
**$$Until$June$2018
2017 2018
31-Dec- %- %- Healthy)July)2018)
BUDGET-ITEMS July- %-Growth-to- July- %-Growth-to- Budget)Realization
Realizati Realization- Budget Realization- Outlook
Realization July-2016 Realization July-2017
on to-Budget to-Budget
A. REVENUE ---1,665.2 ------------853.8 ------------49.2 ---------------10.3 ----1,894.7 ----------994.3 ------------52.5 ----------------16.5 ---1,903.0 • Healthy$budget:
I.#DOMESTIC#REVENUE ###1,655.5 ############852.9 ############49.2 ###############10.4 ####1,893.5 ##########991.0 ############52.3 ################16.2 ###1,897.6 Robust$tax$growth$
1.#Tax#Revenue,#of#which: ###1,343.6 ############680.7 ############46.2 ###############10.3 ####1,618.1 ##########780.1 ############48.2 ################14.6 ###1,548.5 and$positive$
a.#Income#Tax #######646.9 ############367.6 ############46.9 ###############11.0 #######855.1 ##########420.6 ############49.2 ################14.4 performance$of$
b.#VAT #######480.7 ############228.7 ############48.1 ###############11.6 #######541.8 ##########261.3 ############48.2 ################14.3 VAT$and$Income$
c.#Land#and#Building#Tax #########16.8 #################0.9 ##############5.8 ##############(18.1) ##########17.4 ##############1.0 ##############5.5 ##################6.9 Tax
2.#Non#Tax#Revenue #######311.9 ############172.1 ############66.2 ###############10.7 #######275.4 ##########211.0 ############76.6 ################22.6 #######349.2
• Central$
II.#GRANT ###########9.7 #################0.9 ############28.3 ##############(19.1) ############1.2 ##############3.3 ##########273.1 ##############273.1 ############5.4
Government$
Expenditure$
B. EXPENDITURE ---2,001.6 --------1,063.8 ------------49.9 ------------------2.5 ----2,220.7 ------1,145.7 ------------51.6 ------------------7.7 ---2,217.3
grows$robustly
I.#CENTRAL#GOVT#EXPENDITURE,#of#which: ###1,259.6 ############604.7 ############44.2 ##################3.3 ####1,454.5 ##########697.0 ############47.9 ################15.3 ###1,453.6
• Deficit$realization$
1.#Personel#Spending #######312.7 ############192.3 ############55.9 ################(4.9) #######365.7 ##########214.6 ############58.7 ################11.6
of$1.02%$of$GDP$
2.#Capital#Spending #######204.2 ##############58.4 ############26.0 ###############14.4 #######203.9 ############54.1 ############26.6 #################(7.4)
is$much$lower$
3.#Subsidy #######166.4 ##############67.8 ############40.2 ##############(15.2) #######156.2 ############91.3 ############58.4 ################34.5 compared$to$July$
4.#Grant ###########5.4 #################2.0 ############37.0 #############847.8 ############1.5 ##############0.0 ##############2.4 ##############(98.3) 2017$of$1.56%
5.#Social#Spending #########55.3 ##############32.0 ############54.3 ###############14.4 ##########81.3 ############56.2 ############69.2 ################75.8 • Primary$balance$
II.#TRANSFER#TO#REGION#AND#VILLAGE#FUND #######742.0 ############459.1 ############59.9 ##################1.6 #######766.2 ##########448.6 ############58.6 #################(2.3) #######763.6 surplus$is$
1.#Transfer#to#Region #######682.2 ############423.3 ############59.9 ################(0.2) #######706.2 ##########412.8 ############58.5 #################(2.5) #######703.6 significantly$
2.#Village#Fund #########59.8 ##############35.8 ############59.7 #################Z ##########60.0 ############35.9 ############59.8 ##################0.1 #########60.0 higher$than$last$
C.- PRIMARY-BALANCE -----(119.8) -------------(79.1) ------------44.5 --------------(49.0) --------(87.3) -------------(4.9) --------------5.6 --------------(93.8) --------(64.8) year,$ highlighting$
D.- BUDGET-SURPLUS-/-(DEFICIT)-(ADB) -----(336.4) ----------(210.0) ------------52.9 --------------(20.3) ------(325.9) --------(151.4) ------------46.4 --------------(27.9) -----(314.2) improving$fiscal$
%"Surplus"/"(Deficit)"to"GDP """""""(2.48) """"""""""""(1.56) %%%%%%%%%%% 53.4 """"""" (2.19) """"""""""(1.02) %%%%%%%%%%% 46.6 """"""""""""""(34.6) """"""""" (2.1) performance$and$
E. BUDGET-FINANCING,-of-which: -------361.9 ------------298.8 ------------75.2 ------------------0.9 -------325.9 ----------205.5 ------------63.0 --------------(31.2) -------314.2 sustainability$that$
I. DEBT#FINANCING #######423.7 ############296.4 ############64.3 #######399.2 ##########205.3 ############51.4 ##############(30.7) #######387.4 well$
II. INVESTMENT#FINANCING #######(59.8) ###############(0.1) ##############0.2 ########(65.7) #############(1.6) ##############2.4 ##########1,140.0
Budget)Realization)Update)until)31)July)2018
Realization) of)the)APBN)deficit)and)the)primary)balance) deficit)up)to)July)31,)2018,)the)lowest)compared)to)
the)same) period)in)2016[2017
Trillion4Rupiah Trillion4Rupiah
150,0 150,0
SiLPA realization is
92,9
100,0 88,7 100,0 lower than the previous
38,3
55,3 year
50,0 50,0
15,0
0,0 0,0
(4,9) Primary balacce deficit
(50,0)
2015 2016 2017 2018 (50,0) decreased compared to
(73,2) (79,1) the last 3 years
(100,0) (100,0)
0,63% PDB
(150,0)
(140,2) (151,3)
(150,0) Realization of the
budget deficit is lower
(200,0) 1,02% PDB (200,0)
than in 2016B2017
(210,0)
(250,0) (250,0)
(247,5)
1,55% PDB
1,82% PDB
Budget$Deficit
Defisit Anggaran SiLPA
Silpa Primary$Balanceprimer (RHS)
Keseimbangan
Increased)Economic)Activity)and)Taxpayer)Compliance)Have)a)
Positive)Impact)on)Increasing)Tax)Revenue)until)July)2018
…grows)14.6%)(without)TA)16.6%)
Trillion4Rupiah %
Influencing factors are:
780,1
800.0 16.04 1.The$increase$in$economic$growth$in$
680,7
14.04 Semester)I)2018)was)5.17)
700.0
621,1 607,9
14.64 12.04
percent)compared$to$5.01$percent$in$
600.0 the$same$semester$ last$year.$
12.04 10.04
2.Rising$oil$prices$(ICP)$in$the$period$of$
500.0
8.04 Jan[Jul)2018)USD67.2)per)barrel)
400.0 6.04 compared)to)USD48.4 in$the$same$
4.04
period$last$year.$
300.0 1.24
3.The$improvement$in$world$commodity$
2.04
200.0 prices,$especially$coal,$although$still$
(2.1)
0.04 limited,$amounted$to$USD97.7)per)
100.0
(2.0) ton)in)January[July)2018)compared$
0.0 (4.0)
to$USD81.7$per$ton$in$the$same$ period$
2015 2016 2017 2018 last$year.$
4.Increased)level)of)taxpayer)
compliance)in$paying$tax.
Oil4&4gas4
PPh4migas NonOoil4&4gas4
Pajak4nonmigas Kepabeanan4 dan4 Cukai Pertumbuhan4
Customs4&4excise Growth
income44tax income44tax
Customs)and)Excise)Revenue)Growth)until)July)2018)
It)is)the)highest)in)the)last)three)years
triliun8Rp
Trillion& Rupiah %
persen
100,0 92,9 20,0
90,0 86,2 16,4
79,8 15,0
80,0 73,4
10,0
70,0 8,7
60,0 5,0
50,0 0,0
40,0 (5,0)
30,0 !7,9
(10,0)
20,0
!14,9 (15,0)
10,0
0,0 (20,0)
2015 2016 2017 2018
Cukai
Excise Bea8Masuk
Import&duty Bea8Keluar
Export&duty Pertumbuhan
Growth
increased) export) The)recovering)global) Improvement)of)customs)

and)import)activity) trade)is$marked$by$ and)excise) policies)e.g.$
compared$to$the$same$ improving$commodity$ controlling$the$risky$import$/$
period$last$year. prices$ on$the$world$market.$ PIBT$and$controlling$customs$
(eradicating$ illegal$excise)
In)the)Last)Three)Years,)the)Absorption)of)Ministries/Govt
Institutions)Expenditures)until)31)July)2018)Continues)to)Increase
…while) the)absorption)rate)of)Non)K)/)L)Spending)tends)to)be)stable
Expenditure: K/L Expenditure: Non-K/L
TrillionRupiah
Triliun Rupiah Chart%Title % Trillion Rupiah
Triliun Rupiah Chart%Title %
900,0% 50,0% 700,0% 60,0%
800,0% 44,4% 45,0% 52,9%
600,0% 50,2% 50,0%
39,7% 41,2% 40,0% 47,7% 48,5%
700,0%
35,0% 500,0%
600,0% 32,8% 40,0%
30,0% 400,0%
500,0%
25,0% 30,0%
400,0% 300,0%
20,0%
300,0% 20,0%
15,0% 200,0%
200,0% 10,0%
100,0% 10,0%
100,0% 5,0%
! ! ! !
2015 2016 2017 2018 2015 2016 2017 2018
Budget
APBN/P Realization until&end
Realisasi%s.d% of July
akhir%Juli %&of Budget absorption (RHS)
%%penyerapan%(RHS) Budget
APBN/P Realization until&end
Realisasi%s.d% of July
akhir%Juli %&of Budget absorption (RHS)
%%penyerapan%(RHS)
Factors&affecting&the&absorption&rate&of&K&/&L&expenditurt:&
1. Continuation&of&the&policy&of&accelerating&the&implementation&of&activities&through early4auctione&
2. Acceleration&of&distribution&of&social&assistance&such&as&PBI,4PKH,4and4Bidik Misie
3. THR4payment4for4civil4servants4conducted&at&the&end&of&semester&I&2018e
4. Implementation&of&several&strategic4agendas4such&as&simultaneous&local&election&and&Asian&Games&preparation.
Increased)Absorptive)Capacity)in)Non[Physical)DAK)and)Village)
Funds)
Slowing)absorption)capacity) on)Physical)DBH)and)DAK
UNTIL 31 JULY 2018
DBH REALIZATION DAU REALIZATION PHYSICAL DAK REALIZATION
60,0
52,1 53,0 270,0 66,9 67,0 30,0
39,5
45,0
38,4
52,0 40,0
260,0 66,9
50,0 25,0
51,0 29,4 30,9 35,0
66,8
Rupiah
Rupiah
Rupiah
40,0 250,0 20,0 30,0
Persen
Persen
Persen
TriliunRupiah
49,2 66,7
Rupiah
Rupiah
50,0
48,5 66,7
Percent
66,6 25,0
Percent
Percent
240,0 66,5 15,0
Triliun
30,0 49,0
Triliun
48,0
Trillion$
Trillion$
66,6 20,0
Trillion$
48,0
20,0 230,0 10,0 15,0
66,5
47,0
10,0
10,0 220,0 5,0
52,8 53,6 49,7 43,2 46,0 235,3 256,4 266,8 267,3
66,4 23,2 26,4 26,7 19,3 5,0
- 45,0 210,0 66,3 - -

2015 2016 2017 2018 2015 2016 2017 2018 2015 2016 2017 2018
Real 31 Juli
Real$31$ July % %$absorb
serap Real 31 Juli
Real$31$ July %$absorb
% serap Real$31$
Real July
31 Juli %$absorb
% serap
NON-PHISICAL DAK REALIZATION VILLAGE FUND REALIZATION
60,4 40,0 80,0

80,0 61,0 70,7
35,0 70,0
70,0 60,0 59,7 59,8
58,1
60,0
58,1 59,0 30,0 60,0
57,5
Triliun Rupiah
Triliun Rupiah
Rupiah
Rupiah
Persen
58,0 Persen 25,0 50,0
50,0
Percent
57,0
Percent
20,0 40,0
Trillion$
40,0
Trillion$
54,8
56,0
30,0 15,0 30,0
55,0
20,0 10,0 20,0
54,0
10,0
56,3 73,3 66,1 71,7 53,0
5,0
14,7 27,3 35,8 35,9 10,0
- 52,0 - -
2015 2016 2017 2018 2015 2016 2017 2018
Real$31$
Real July
31 Juli %$absorb
% serap Real$31$
Real 31 JuliJuly % %$absorb
serap
Financing4 Plan4For42018
Creating4prudent4and4sustainable4fiscal4management
Government4Securities4to4Meet4State4Budget4Financing Issuance4Targets4for4Government4Securities
Indicative Budget4Target
25%&)
Instruments IDR4tn USD4bn 30%
Budget4Deficit4(2.19% of4GDP) 325.9 24.3
Financing 399.2 29.8
Government4Securities4(Net) 406.4 30.3
Government4Securities4(Gross) 834.3 62.3 70%&)
75%
Composition Government&Debt&Securities
Domestic&&Government&Securities 80&) 83% Alternative4of4Issuance
International Government&Securities 17&) 20%
Private4 Book4
Domestic4Government4Securities Auction
Placement Building
Weekly4Auction:
Conventional&securities 24)25x
Government4Securities4Financing4Realization
Realization4 %4Realization4
Islamic&securities 24)25x Budget4 2018 (as4of4May,4 to4Budget4
NonOAuction 2018) 2018
USD4 USD4
IDR4tn IDR4tn
Retail&Bonds&and&Retail&Sukuk bn bn
Based on& Government4 securities4(net) 406.4 30.3 190.8 14.2 46.9%
Private&Placement
request
Government4 securities4(gross) 834.3 62.3 434.9 32.5 52.1%
Target4avg.4tenor4maturity4for4Government4Securities4Issuance
Government4 debt4securities4(GDS) 602.24 44.9 303.24 22.6 50.4%
7O84years
International4Government4Securities ) Domestic&GDS 504.3& 37.6 205.3& 15.3
• USD Avoid&crowding&out&in&domestic&market ) International&bonds 103.8& 7.3 98.0& 7.3
• Sukuk USD Government4 Sukuk 232.14 17.3 131.74 9.7 56.8%
Provide&benchmarks&for&corporate&&bonds
• EUR
Diversify&investor&base ) Domestic&Government sukuk 190.7& 14.2 85.7& 6.7
• JPY
) Global&Sukuk 41.4& 3.0 41.4& 3.0
3.)Fiscal)Policy)and)the)2019)Budget)
Medium)Term)Fiscal)Framewok
Focusing)on)quality)and)productive)spending,)expanding)fiscal) space)and)sustainability
Budget
Description (%4GDP) 2019** 2020 2021 2022
2018
Revenue4 &4Grants 12.76 12.7&– 13.5 12.7&– 13.9 13.5&– 14.0 13.6&– 14.4
Tax4Ratio* 11.6 11.4&– 11.9 11.4&– 12.5 11.6&– 13.0 11.8&– 13.6
Total4Spending 14.95 14.2&– 15.4 14.3&– 15.6 15.0&– 15.7 15.1&– 16.0
Capital4Expenditure 1.4 1.5 ) 1.7 1.8&– 2.3& 2.2&– 2.7 2.3&– 3.0
Primary4Balance (0.59) 0.05 )(0.30) 0.05&– 0.01 0.10 – 0.01 0.1&– 0.05
Budget4 Deficit (2.19) (1.6) ) (1.9) (1.6) ) (1.7)& (1.5) ) (1.7) (1.5) ) (1.6)
Debt4 Ratio 29.07 28.8 – 29.2 28.50&&) 28.61 27.81 – 28.30 26.25 – 27.87
*Including4revenue4from oil &gas4and4 general4mining

**4submitted4to4parliament4for4discussion
# Strengthening4 quality4of4spending4by4increasing4 productive4 # Developing4 creative4 and4innovative4financing

avenues # Manageable4 deficit4and4debt4level
# Enlarging4 fiscal4space4 through4revenue4 increase # Positive4 primary4 balance4 in42020
# Efficiencies4 in4nonOpriority4spending
Macroeconomic)Indicators)that)Form)the)Basis)for)Calculating)
the)2019)Budget)Draft
Considering the latest developments 2017 2018 2019

in$economic conditions,$outlook and Indicators
Realization Outlook Budget)Draft
future prospects
Economic) Growth
5.1 5.2 5.3
(%,)yoy)
Focus)of)the)2019)Budget Draft Inflation
3.6 3.5 3.5
(%,)yoy)
Exchange)Rate))
• Efficiency and quality of priority 13,384 13,973 14,400
(Average)IDR/US$)
spending ! increasing human
resources, social protection, 3[Month)Treasury)Bill)
5.0 5.0 5.3
competitiveness, investment and
(%)
infrastructure
ICP
51 70 70
(US$/barel)
• Realistic revenue mobilization ! taxes
Oil)Production)(thousands)of
for competitiveness & investment barrel/day) 804 775 750
• Fiscal health ! productive, efficient, Gas)Production

and Sustainable 1,142 1,116 1,250
(millions)of)barrels/day)
Budget&Draft&2019
Budget&Draft&2019
Budget&Draft&2019
Budget& Draft&2019
the&budget&deficit&in&2019&is&directed&towards&further&decline
Central&
Tax decreased&primary&balance&is&getting&closer&to&positive Government& Local&Govt &&
Non)Tax Expenditure Village&Fund
Grant
Budget4Financing
Government&
Revenue Government&
Expenditure
Investment
Debt&financing
financing
Budget)Deficit)is)Going)Down)and)Primary)Balance)towards)Positive)
Direction))))
Budget decifit is reduced under 2%)of GDP,)for thepersen

first Primary
Triliun$Rpbalance gets near to Rp0 ! consistentlypersen
going
time since 2013 down since 2015
Outlook RAPBN
Budget$
Outlook RAPBN
Budget$ 2012 2013 2014 2015 2016 2017 2018 2019Draft$2019
Rp Tn
Triliun$Rp 2012 2013 2014 2015 2016 2017 2018 Draft$2019
2019
./ ./ ./ ./
(21,7)
.(20,0)
.(50,0)
(52,8) (0,13) .(0,20)
.(0,50) (64,8)
.(40,0)
.(100,0)
(226,7) (98,6) (93,3) .(0,40)
(153,3)
(211,7) .(1,00) .(60,0) (125,6) (124,4)
.(150,0) (298,5) (297,2) .(0,60)
(308,3) (314,2) (142,5) (0,44)
(341,0)
.(80,0)
.(200,0) .(1,50)
(1,86) .(0,80)
.(100,0) (0,64)
.(250,0)
.(2,00) (0,92) .(1,00)
.(120,0)
(2,33)
.(300,0)
(1,84) (0,92)
(2,25) .(140,0) (1,09) .(1,20)
(2,12) .(2,50) (1,01)
.(350,0) (2,49) (2,51) (1,23)
(2,59) .(160,0) .(1,40)
.(400,0) .(3,00)
Keseimbangan.primer.(RHS)
Primary$balance$(RHS)
Budget$ Deficit$to$GDP$(RHS)
Defisit.Anggaran
Deficit
Defisit.terhadap.PDB.(%)./.RHS Primary$balance$deficit$to$GDP$(%)
Defisit.Keseimbangan.Primer.terhadap.PDB.(%)
Balance)between)Physical)Development)and)HR,)Central)and)
Regional)Development,)and)Progressive)Taxes
Taxes)Become)an)Incentive)to)Maintain) Strengthening)and)Balance)of)Physical)
the)Purchasing) Power)of)Society)&) Development)and)HR
Economy
Infrastructure$ Budget
• Increase of • Deduction of 2015$:$Rp256,1$T 2019$:$Rp420,5$T
non–taxable income tax rate Education Budget
income for SMEs to 2015$:$Rp390,1$T 2019$:$Rp487,9$T
•2013:$24.3$ 0.5% Health Budget
millions Rupiah 2015$:$Rp65,9$T 2019$:$Rp122,0$T
•2016:$54.0$ Social Protection Budget
millions Rupiah 2015$:$Rp249,4$T 2019$:$Rp381,0$T
Tax)Incentives)for)the)business)on)a) Strengthening)the)balance) of)development)

targeted)basis)(tax)holiday)/)allowance) between) the)center)and)the)regions
Criteria,$e.g.: Local govt transfer$&$village fund
2015$:$Rp623,1$T 2019):)Rp832,3) T
consider$investment$ value,$
Pioneer industry export$orientation,$and$ balance
employment Central govt (K/L)
2015:$Rp732,1$T 2019):)Rp840,3) T
Tax)Revenues)is)the)Main)Source)of)State)Expenditures
Tax)contributions)continue)to)increase) [[>83,1%) Debt)financing)is)decreasing

(2014:)74,0%)
500,0 80,0
2,500.0) 2.142,5)
429,1
403,0
1.903,0) 16,9% 380,9 387,4
2,000.0)
1.666,4)
400,0 58,5 359,3 60,0
1.550,5) 1.508,0) 1.555,9) 18,3% 49,0
1,500.0) 18,7%
25,7% 17,0% 16,8% 300,0
31,7 255,7 40,0
223,2
1,000.0)
83,1% 200,0 20,0
82,3% 82,6% 80,6%
81,4% 140,8 14,6 5,8
74,0%
500.0)
100,0 (7,3) 0,0
0.0)
6,5 (9,7)
2014 2015 2016 2017 outlook) RAPBN) 0,0 !20,0
2018 2019
2012 2013 2014 2015 2016 2017 outlook RAPBN
Non[tax
Penerimaan)perpajakan
Tax)revenue PNBP
revenue
Hibah
Grant
2018 2019
Pembi ayaan Utang
Debt)financing Growth
(RHS) (RHS)
Growth)
The)2019)Budget)Draft)to)Encourage)Investment)and)
Competitiveness)through)Human)Resource)Development
The)2019)Expenditure Focus Better)Spending)Quality)

1. Increase investment in education Supported)by)Accountability)
to improve the quality of human Improvement
resources by strengthening PIP, BOS,
1. Strengthening budget planning
scholarships, vocations, and
accelerating school renovations.
Focus supported by comprehensive and
coordinated monitoring and
2. Strengthening social protection evaluation
programs through JKN expansion, as
2. Efficiency through savings and
well as increasing the amount of PKH
appropriate procurement of
benefits.
motor vehicles, buildings, and
3. Maintaining the continuity of official travel
infrastructure development for
3. More accountable management
equitable development.
(since 2016, LKPP received the
4. Strengthening bureaucratic reform title of WTP)
by facilitating public services and
investment.
5. Successful implementation of a
democratic agenda.
4.)Policy)for)Sustainable) Development
Government)Commits)to)Qualified)and)Sustainable)Development
Improving)economic)competitiveness) and productivity)while)maintaining) stability
Maintaining)Stability)in)the) Improving)Competitiveness) Facilitating) Investment and)

Midst)of)Global)Turmoil and)Productivity Export
1. Strengthening monetary and 1. Acceleration completion of 1. Sectoral Tax Incentives

fiscal policy mix and infrastructure a. Exemption of import duty of
coordination 2. Simplifying licensing machines and capital goods
b. Incentives on
2. Boosting the consumption of 3. Implementing Online exemption/repayment
20% of CPO (B20) biodiesel Submission System c. Incentives on import duty borne
3. Increasing local content of 4. Efficiency of dwelling time by the government (BMDTP) for
infrastructure projects, certain industries
5. Promoting upstream industry
especially electric generator d. Tax allowance/holiday
6. Improving tax holiday ! up e. Income tax deduction
4. Selective import
to 20 years f. Accelerating tax restitution
5. Extensification of products
7. Preparing additional
imposed by increased import 2. Spatial Tax Incentives
incentive to support human
income tax a. Special Economic Zones (12 SEZ)
resources development
through vocational training b. Industrial area/bonded area
and R&D (1396 KB)
c. Bonded Logistics Center (60
8. Fostering tourism sector
PLB/81 locations)
d. Free Trade Zone (4 KPBPB)
Structural)Reforms)to)Support)Economic)Fundamental)
…to)boost)FDI,)consumption,)and)export
Economic policy packages to create conducive investment climate and resolve

supply side issues
FDI relaxation to encourage more investment to boost productivity and create

jobs
Infrastructure acceleration to improve connectivity and unleash economic

potential across nation
Tax Incentive for several sectors to advance the sectors and tax incentive for
several zones to reduce disparities among regions and bolster regional
economic growth
Launching of Online Single Submission to simplified investment
Tax)Reform)has)been)Implemented)since)2015)
…through)policy)strengthening)and)organizational)improvement
Tax Amnesty
• Uang$ tebusan$
Increasing NonBtaxable mencapai$ 1%$PDB
Income
• From Rp24.3) milliom
2019
(2013))to Rp54)miilion 2018
2017
Income Tax Relief$on
Asset Revaluation Reducing MSMEs tax to 0.5%$
2016 •
• Accelerating restitution
• AEoI implementation
• Targeted incentives
• Increasing tax amnesty • Compliance$Risk$
• Confirmation on tax
compliance Management$ (full)
payer status
Compliance Risk Management
2015 •
(rollBout)
• IT$enhancement
Tax Reform
Organization Human)Resources IT)and)Database Business)Process Regulation
Tax)Incentives)to)Boost)Export)and)Investment
Tax)
Allowance
for) Tax)Incentive)Policy
Investment
• Tax&deductions&to&support&the&
Income)Tax)
Deduction)
development&of&certain&
Provision)of)
for)Pioneer) Import)Duty) sectors&(pioneers),
Industry Facilities
• Tax&allowances&to&support&
Tax) additional&investment,
Incentives
,& • Tax&reduction&to&support&R&&&
D&and&vocational&activities.
Export) Special)Zone
Facilities
Tax)Holiday)Facilities)(Revised)Regulation)
Changing)of)mindset)to)support)investment) through)attractive) incentives) and)simplified) procedure)on)CIT)
OLD NEW
Describtion PMK)103/2015 PMK)35/2018
Subject New$Tax$Payers New$Investments
Deduction 100%
10B100%
Percentage (single rate)
Duration) Investment plan)(Billion)IDR)
(Years)
5 500bn$to <$1tn
5B15$years
Can$be$extetended to$20$years$ 7 1tn$to$<$5tn
Duration
with$Minister$(MoF)$discretion$ 10 5tn$to$<$15
15 15tn$to$<$30tn
20 Minimum$30tn
Transition Unregulated 50%$in 2$years
8$Scopes$on$Pioneer$
Industry Scope 17$Scopes$of$Pioneer$Industries
Industries
Deduction)of)Income)Tax)Rates)for)SMEs
Rate Tax Subjects
1% 0,5% • Personal$(7$years period)

• Corporate
• Limited liability company (3$years)
• CV,$firm,$&$cooperative,$(4$years)
Benefits
• Encouraging$community$ participation$ in$
formal$economic$activities$ Tax Objects
• Providing equality • Income from business
• Ease$ in$carrying$out$tax$obligations • Annual turnover is not$more than 4,8$
• Providing$opportunities$to$contribute$ to$ billion Rupiah
the$country • Total$turnover is calculated from all outlets
• Knowledge&of&tax&benefits
Taxation)policies)also)contribute)to)improving)the)investment)
climate)and)ease)of)doing)business
One$indicator that is increasing is

2018:#72 "The$level$ of ease in$paying taxes”
In$ the$ EODB$ 2018$report,$ Went$up$19$ 2017: # 9 1
Indonesia$ rose$ 19$ranks,$ Rankings 2016: # 1 0 6 7)indicators)of)improvement) :
from$ 91$to$72 2015: # 1 1 4 1. Easier$ to$start$business
2. Easier$ to$get$electricity
68 Vietnam
72 INDONESIA 3. Easier$ to$register$property
78 Tiongkok 4. Improving$the$sharing$of$credit$
information
5. Strengthening$minority$investor$
protections
100 India
6. Easier$ to$pay$taxes
7. Easier$ to$trade$across$ border
113
Philippines
Improved Time to Comply and Post
125
Brazil Filing Index through:
• Improvement of business processes and
supporting infrastructure in the field of
registration (through online single
submission / OSS, payment, reporting
and restitution
• Improved quality of inspection
• Acceleration of completion of restitution
Allocating)More)on)Productive)Spendings
Committed)to)strengthen)human)capital) through)infrastructure,) education)and)health)spending
Infrastructure4Allocation4(more4than418%4of4Spending4in4the4last4two4years)
Infrastructure4acceleration4to4tackle4regional4and4global4
challenges
2014: 2015: 2016: 20174 : 2018: Target4:4
154.7 256.1 269.1 400.9 410.4 • Road:&856&km
• Railway:639&km’sp
• New&airports&in&15&locations
• Irigation:781&km
• Electrification&ratio:&95.15%e
Health4Allocation4(5%4of4Spending) • Housing:&7062&unit
2018:
Focuses:4improving4supply4side,4better4access,4service4quality,4
2017: promoting4preventive4action,4and4maintain4JKN4sustainability.
2016: 111.0
104.9
2014:
2015: 92.3 Policies4direction
65.9
59.7 • Improving distribution&of&health&facilities&and&health&personnel
• Strengthening&promotive and&preventive&programs
• Improving the&effectiveness&and&sustainability&of&the&national&health&
insurance&program
• Increasing&the&role&of&local&government&for&supply&side&as&well&as&service
Education4Allocation4(20%4of4Spending) side
2018: Focus4on4improving4access,4distribution,4and4quality4of4
2014: 2015: 2016: 2017: 444.1 education
353.4 390.1 370.4 419.8
Policies4direction
• Improving&access,&distribution,&and&quality&of&education
©"hamdanhasan.deviantart.com
• Improving&school&facilities&and&infrastructure
• Synergy&between&Central&and&Local&Government
• Strengthening&vocational&education&and&link&and&match&curriculum
• Widening&access&(BOS,&PKH,&PIP,&Bidik Misi and&DPPN)&for&sustainable&
education
Strategy4to4Improve4Infrastructure
Collaboration)among)state)budget,)SOE)budget)and)private)sector
Developing) new)ways)to)attract)infrastructure)investment
• Allocating$more$money$ Infrastructure)Needs)by)Sector)2015)[ 2019)(in) Area)of)infrastructure)financing)
does$not$necessarily$ trillions)Rupiah) alternative
mean$an$increase$in$
STATE) REVENUE
infrastructure$quality.$ 1.000 591 733 328 507
The$capacity$and$quality$ Tax$Allowance,$Tax$Holiday,$Fiscal$
of$spending$relation$ Incentives
does$not$align$perfectly.$
Above)the)line
STATE) EXPENDITURE
• For$infrastructure$ Line)Ministries
spending,$Indonesia$ ELECTRICITY PORT ROAD S HOUSING OIL & GAS (Ministry$of$Public$Works,$Ministry$of$
should$invite$more$ Transportation,$Ministry$of$Energy, etc)
private$capital$(through$ 226 144 987
PPP).$ Infrastructure$
280
Non)Line)Ministries
funding$gap,$is$expected$ (o/w.$VGF,$PDF,$grants,$PSO)
to$be$potentially$fulfilled$
by$either$SOE$&$Private$ Transfer) to)the) Regions) &)Village)Fund
Sector (o/w.$DAU$(25%),$Physical$DAK,$Village$
OTHERS Fund)$
TELCO)&IT TRAIN S AIRPORT
Update)on)PPP)Projects FINANCING
Below)the)line
Revolving$Fund$(o/w.$FLPP),$Project$based$
Total
No Status Sector bonds$(e.g.$SUKUK),$Capital$injection$in$PT$
projects
SMI$&$PT$IIF$(financing)$as$well$as$PT$IIGF$
1. Financial&Close 74 Electricity&, water&and&sanitation,&toll&road,& (guarantee),$Subsidiary$Loan$Agreement,$
telecommunication Guarantee,$Investment$(capital$injection)$in$
2.& PPP agreement 84 Toll&road SOE,$Capital$injection$in$BLU$LMAN for$land$
clearing
3.& On transaction 3 Water&supply and&toll&road
4.& FBC&(under project& 6 Transport, health facility, toll&road,&water&supply
development&fund)
Solid)Policy)Coordination)in)Managing)Financial)Markets)Volatility
The)enactment) of)Law)No.)9/2016) regarding) Gov’t)Securities)Crisis)Management)Protocol (CMP)

Prevention) and)Mitigation) of)Financial)System)
Crises)as$a$legal$foundation$for$the$government$to$ " Indicators:
serves$at$the$time$ of$financial$crisis$in$the$form$of$ B Yield$of$benchmark$series`
Financial) System)Stability) Committee)(KSSK) B Exchange$rate`
B Jakarta$Composite$ Index`
B Foreign$ownership$in$government$securities
KSSK) members:$the$Ministry$of$Finance,$Bank$
Indonesia,$the$Financial$Services$Authority,$and$the$ " Policies)to$address$the$crisis$at$every$level$ :
Deposit$Insurance$Corporation B Repurchase$the$government$securities$at$secondary$market
B Postpone$or$stop$the$issuance
Most)important) provisions) stipulated) in)the) Law: Bond)Stabilization)Framework
• Financial) system)stability) monitoring) and)
First)Line)of)Defense
maintenance) by$KSSK$members$based$on$crisis$
management$protocol$of$each$member` Buyback$fund$ at$DG$of$Budget$Financing$ and$ Risk$
Management
State) Budget
• Prevention) of)financial)system)crisis,$including$ Investment$fund$at$Public$Service$Agency$
the$mitigation$ of$systemically$ important$bank’s$ (BLU) (min.$level$Aware)
liquidity$and$solvency$problems` State) Owned)
Enterprises) (SOE)’s) Related$SOEs$(min.$level$Aware)
• Recovery)Plan)for) Systemically)Important) Budget
Banksn
Social) Security
• Bank)Restructuring) Program Administrating Agency BPJS$(min.$level$Aware)
(BPJS)’s)Budget
Gov’t)Securities)CMP)Level Second) Line)of)Defense
State$General$Treasury$Account$ (Rekening$
NORMAL AWARE ALERT CRISIS KUN)$ (min.$level$Alert)
State) Budget
Accumulated$cash$surplus$(SAL)$ (min.$Level$
Crisis)
Thank4you
Fiscal4Policy4Agency
Ministry4of4Finance
The4Republic4of4Indonesia

Ministry of Finance, Indonesia

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The views expressed in this presentation are the views of the author and do not necessarily reflect the

1. Current Economic Development

2. The 2018 Budget Performance

3. Fiscal Policy and the 2019 Budget

4. Policy for Sustainable Development

GDP2Breakdown2by2 2016 2017 2018

GDP)Growth by)Sector 2016 2017 2018

• Inflation is more benign

Direct)Investment)Realization " Capital realization in the second quarter of

Indicators Realization) Realization)

Economic)Growth)(%,)yoy) 5.2 5.01* 5.4 5.17*

Inflation)(%,)yoy) 4.3 3.9 3.5 3.2

3[month)Treasury)Bill)(%) 5.2 5.1 5.2 4.6

Exchange)Rate)(Rp/US$) 13,400 13,333 13,400 13,855

increased) export) The)recovering)global) Improvement)of)customs)

Expenditure: K/L Expenditure: Non-K/L

UNTIL 31 JULY 2018

DBH REALIZATION DAU REALIZATION PHYSICAL DAK REALIZATION

40,0 250,0 20,0 30,0

- 45,0 210,0 66,3 - -

NON-PHISICAL DAK REALIZATION VILLAGE FUND REALIZATION

60,4 40,0 80,0

*Including4revenue4from oil &gas4and4 general4mining

# Strengthening4 quality4of4spending4by4increasing4 productive4 # Developing4 creative4 and4innovative4financing

Considering the latest developments 2017 2018 2019

• Fiscal health ! productive, efficient, Gas)Production

Budget decifit is reduced under 2%)of GDP,)for thepersen

Tax)Incentives)for)the)business)on)a) Strengthening)the)balance) of)development)

Tax)contributions)continue)to)increase) [[>83,1%) Debt)financing)is)decreasing

The)2019)Expenditure Focus Better)Spending)Quality)

Maintaining)Stability)in)the) Improving)Competitiveness) Facilitating) Investment and)

1. Strengthening monetary and 1. Acceleration completion of 1. Sectoral Tax Incentives

Economic policy packages to create conducive investment climate and resolve

FDI relaxation to encourage more investment to boost productivity and create

Infrastructure acceleration to improve connectivity and unleash economic

Launching of Online Single Submission to simplified investment

Transition Unregulated 50%$in 2$years

Rate Tax Subjects

1% 0,5% • Personal$(7$years period)

One$indicator that is increasing is

The)enactment) of)Law)No.)9/2016) regarding) Gov’t)Securities)Crisis)Management)Protocol (CMP)

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