Benefits of State Expenditures for Economic Stimulus

The role of the State Revenue and Expenditure Budget (APBN) as an economic stimulus instrument is becoming increasingly crucial, especially in the context of global economic uncertainty and efforts to achieve national development targets.

Focusing on strengthening state revenues and expenditures is essential to ensure the sustainability and effectiveness of the APBN. In this context, analysis of the ratio of state expenditure to Gross Domestic Product (GDP) is the key to understanding the extent to which the APBN can function as a catalyst for economic growth.

Data shows the growth trend of Indonesia’s state spending on GDP from 2019 to 2023. In 2019, this percentage was 14.6%, increased in 2020 to 16.8%, and although it decreased in 2021 it reached 16.4%.

This trend continues to fluctuate until it reaches 14.8% in 2023. Despite the decline, the level of state spending remains high, showing commitment to development and economic stimulus.

Interestingly, a comparison of Indonesia’s state spending ratio with other countries in 2022 provides a global perspective. Indonesia has a ratio of state spending to GDP of 15.2%.

Meanwhile, other countries such as England have a spending to GDP ratio of (42.0%) and Italy (37.0%), Australia’s spending to GDP ratio is 26.3% and Japan (22.1%) and China are 24. .8%.

Even though Indonesia’s spending ratio is relatively balanced, there are challenges that must be overcome. Improving the quality of public spending and efficiency in budget use is key. Opportunities open in optimizing spending to support strategic sectors, including infrastructure, education and health.

Increasing the state spending ratio can have a positive impact on economic growth. Investment in infrastructure, increasing human resource capacity through education, and health care can be the main drivers. In addition, implementing policies that support innovation and productive sectors can have a long-term impact.

Increasing the role of the APBN as a stimulus for the Indonesian economy requires a focus on strengthening state revenues and expenditures. Through analysis of the ratio of state spending to GDP, Indonesia can identify opportunities and challenges to design policies that are right on target, support sustainable economic growth, and face global economic dynamics.

Tuesday, November 19th, 2024
Public Communication Team
Ministry of National Development Planning/Bappenas
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