IDNEWSNOW.COM, Jakarta – The Fiscal Policy Agency predicted that Indonesia’s debt to Gross Domestic Product or GDP ratio will leap from 37.6 percent in 2020 to 41.09 percent in 2021. The surge in debt was deemed as the consequence of the likely negative trend in the primary balance next year.
However, the next year’s primary balance was estimated to improve at minus 3.59 percent of GDP compared to this year’s minus 4.27 percent.
“As the deficit is widening in 2021 albeit it begins to consolidate rather than in 2020, the drop in primary balance will still be deep. So it is not a surprise that the debt-to-GDP ratio will increase again. We predict that it is around 41.099 percent,” said the agency head, Febrio Nathan Kacaribu, on a video conference on Friday, October 2, 2020.
The government and the House of Representatives (DPR) have agreed to widen the state budget deficit threshold at 5.7 percent from the draft at 5.5 percent.
Febrio outlined that next year’s state spending was increased to Rp2,750 trillion, while the state revenue was estimated to be Rp1,743.6 trillion. The budget, he added, was designed as the government’s position as the driver of the countercyclical policy.
Febrio ensured that the government would also look for other ways to finance the development sans taking on new debts, such as by encouraging more investment and make sure the spending would be effective in supporting the country’s economic recovery and transformation.
Read: President Jokowi Will Pass Down Major Debts in Future: Indef Economist
CAESAR AKBAR
