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Economy Indonesia Has Strong Capital to Recover This Year

Indonesia Goverment
Indonesian Goverment

JAKARTA – Head of Fiscal Policy Agency of the Ministry of Finance (BKF Kemenkeu) Febrio Kacaribu said the Indonesia economy has strong capital to recover this year. This projection reflects on the budget deficit, the ratio of public debt. And various other economic indicators that have shown improvement.

Febrio said that the contraction growth in Indonesia economy had shown an improving trend. The contraction in the third quarter improved compare to the previous quarter which is expect to occur again in the last quarter of 2020.

“This could be our capital to enter 2021, have the optimism to manage our economy together,” he said in the AcceleratedWebinar Economic Recovery on Tuesday (26/1).

One of the indicators mentioned by Febrio was the state budget deficit. He added, in the context of responding in a fiscal manner, Indonesia’s state cash deficit which reached 6.1 percent of Gross Domestic Product (GDP) throughout 2020 was still better than many countries. No exception in the ASEAN and G20 regions.

“Their deficit is very deep, even double-digit. When compare to us, we are relatively resilient compare to many countries,” said Febrio.

Other Factors Strengthening Expectations for a Recovery in Economy Indonesia

Another factor, the projection of public debt to GDP. As a result of the government’s extraordinary fiscal intervention to contain the pandemic. The public debt of Indonesia and many countries has increased.

Until the end of 2020, Febrio calculated, Indonesia’s public debt ratio was at the level of 38.5 percent of GDP. Meanwhile, neighboring countries such as the Philippines have reached 48.9 percent and Malaysia at the level of 67.6 percent.

“Our debt ratio is among the lowest and the increase is relatively manageable compare to other countries,” he said.

Febrio said that Indonesia’s resilient economy could not be separated from the very strict fiscal discipline for years before the pandemic. This is evident from the APBN deficit which is below three percent, or even less than two percent.


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