2016 State Budget Draft Indonesia: Capital Injections State Companies
Through capital injections the Indonesian government aims to enhance the role of various state-owned enterprises (SOEs) within the process of economic development. In the recently unveiled 2016 State Budget draft, which still requires approval from Indonesia’s House of Representatives, the government allocated a total of IDR 48.2 trillion (approx. USD $3.6 billion) to 24 SOEs in five priority sectors: food security, infrastructure & maritime development, energy security, strategic industry development, and national economic autonomy.
Most of these funds - roughly 48 percent of total planned capital injections - will be disbursed to SOEs engaged in the country's infrastructure and maritime sectors. Several projects that are to see groundbreaking in 2016 include four toll roads on the island of Sumatra, a new runway at the Soekarno-Hatta International Airport (nearby Jakarta), and the high-speed rail line from Jakarta to Bandung (West Java).
Regarding food and energy security development in 2016, the Indonesian government aims to start the construction of rice processing and storage facilities and two geothermal power plants in Dieng (Central Java) and Patuha (West Java).
The government added that, considering sluggish corporate earnings reports so far in 2015, it may cut dividend payments (from SOEs) by 16 percent in 2016 in order to give these SOEs more room for investment.
Below are 19 of the total 24 SOEs that are planned to receive a capital injection next year (several are listed on the Indonesia Stock Exchange):
| State Owned Enterprise (SOE) | Capital Injection |
| Perusahaan Listrik Negara (PLN) | IDR 10 trillion |
| Sarana Multi Infrastruktur | IDR 5 trillion |
| Hutama Karya | IDR 3 trillion |
| Wijaya Karya | IDR 3 trillion |
| Pembangunan Perumahan (PP) | IDR 2 trillion |
| Perum Bulog | IDR 2 trillion |
| Angkasa Pura II | IDR 2 trillion |
| Krakatau Steel | IDR 1.5 trillion |
| Jasa Marga | IDR 1.25 trillion |
| Geo Dipa Energi | IDR 1.16 trillion |
| Industri Kereta Api | IDR 1 trillion |
| Penjamin Infrastruktur Indonesia | IDR 1 trillion |
| Sarana Multigriya Finansial | IDR 1 trillion |
| Perusahaan Perdagangan Indonesia | IDR 500 billion |
| Barata Indonesia | IDR 500 billion |
| Bahana Pembinaan Usaha Indonesia | IDR 500 billion |
| Askrindo | IDR 500 billion |
| Perum Jamkrindo | IDR 500 billion |
| Reasuransi Indonesia Utama | IDR 500 billion |
In the 2016 State Budget draft, the Indonesian government targets to reach an economic growth figure of 5.5 percent (year-on-year), inflation at 4.7 percent (y/y), and a rupiah at IDR 13,400 per US dollar. These are ambitious targets and will require serious government effort as well as a conducive global context.
In the second quarter of 2015, Indonesia’s GDP growth slowed to a six-year low of 4.67 percent (y/y), from 4.72 percent (y/y) in the preceding quarter. As such, full year 2015 growth is expected to hover around the 5.0 percent (y/y) mark (this assumption is based on improved government spending in the second half of the year).
Indonesia's Quarterly GDP Growth 2009–2015 (annual % change):
| Year | Quarter I |
Quarter II | Quarter III | Quarter IV |
| 2015 | 4.72 | 4.67 | ||
| 2014 | 5.14 | 5.03 | 4.92 | 5.01 |
| 2013 | 6.03 | 5.81 | 5.62 | 5.72 |
| 2012 | 6.29 | 6.36 | 6.17 | 6.11 |
| 2011 | 6.45 | 6.52 | 6.49 | 6.50 |
| 2010 | 5.99 | 6.29 | 5.81 | 6.81 |
| 2009 | 4.60 | 4.37 | 4.31 | 4.58 |
Source: Statistics Indonesia (BPS)
Meanwhile, inflation is currently still high at 7.26 percent (y/y), above the full year target of Indonesia’s central bank (4.0 - 5.0 percent y/y). However, Indonesian inflation is expected to ease markedly in the last quarter of the year as the impact of last year November’s subsidized fuel price hike wanes.
Inflation in Indonesia:
| Month | Monthly Growth 2013 |
Monthly Growth 2014 |
Monthly Growth 2015 |
| January | 1.03% | 1.07% | -0.24% |
| February | 0.75% | 0.26% | -0.36% |
| March | 0.63% | 0.08% | 0.17% |
| April | -0.10% | -0.02% | 0.36% |
| May | -0.03% | 0.16% | 0.50% |
| June | 1.03% | 0.43% | 0.54% |
| July | 3.29% | 0.93% | 0.93% |
| August | 1.12% | 0.47% | |
| September | -0.35% | 0.27% | |
| October | 0.09% | 0.47% | |
| November | 0.12% | 1.50% | |
| December | 0.55% | 2.46% | |
| Total | 8.38% | 8.36% | 1.90% |
Source: Statistics Indonesia (BPS)
Inflation in Indonesia 2008-2014:
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | |
| Inflation (annual percent change) |
9.8 | 4.8 | 5.1 | 5.4 | 4.3 | 8.4 | 8.4 |
Source: World Bank
Lastly, the rupiah has been under serious pressure due to external factors. Amid monetary tightening in the USA and China’s recent yuan devaluation the rupiah has slid beyond the IDR 13,800 per US dollar mark.