- Despite the more aggressive social spending, the government continues to maintain a positive budget balance so far in 2023 as the realisation of spending on subsidies, personnel, and goods is slowing relative to the trend.
- By maintaining a healthy SAL balance and decreasing the need for the government to turn to the bond market for funding, more constrained fiscal spending in 2023 may help the economy maintain price stability and stability in the financial (bond) market in the upcoming periods.
- Despite its positive impact on price and financial market stability, lower fiscal spending may have some detrimental impacts on Indonesia’s GDP growth prospects, given the increasingly vital contribution of government spending.
