2021 Draft State Budget Includes Measures to Handle COVID-19: Sri Mulyani
Date 28 Juli 2020
Indonesian Minister of Finance Sri Mulyani has announced that the posture of the 2021 draft State Budget must include measures to handle COVID-19 and restore the economy.
In a press statement on Tuesday (28/7), the Minister address several issues, namely:
First, the macro assumption was agreed in the form of range and how it affects the State Budget posture.
“Based on discussion with the House, the economic growth stands at around 4.5 to 5.5% next year. The Government sees uncertainty following the rising number of COVID-19 worldwide that has caused the economy become a bit fragile,” Sri Mulyani said.
She added that President Joko “Jokowi” Widodo would later officially announce the figure of the country’s economic growth and inflation in his annual state address on 14 August.
According to her, the State Budget posture for 2021 agreed by the House of Representatives (DPR) which is at a deficit of 4.15% of the Gross Domestic Product (GDP) needs to be widened, given the very high uncertainty of the speed of the pandemic handling in the world.
Second, the global economic recovery will also affect the economic projection next year due to uncertainties following COVID-19. At present, she added, some international institutions predict that the global economy will rebound strong enough next year following a very sharp decline this year.
“However, we see that those institutions continue to revise the economic recovery from 2020 to 2021. The recovery is also estimated to remain uncertain whether a strong rebound or moderate,” said the Minister.
Third, domestic economy will highly depend on the recovery of COVID-19, especially in the second semester or the third and fourth quarters.
“If the measure (tackling COVID-19 cases) is effective and goes well with the opening of economic activities, the economic condition will enable recovery in the third quarter with positive growth of 0.4% and in the fourth quarter it will accelerate to 3%. If that really occurs, then our economic growth throughout the year will be able to remain in the positive zone,” she said.
The measure, she continued, is what the Government continuous to pursue and the President has called on all ministers and local governments to remain in the economic recovery scenario and continue to work in positive zones which is at 0% to 0.4% in the third quarter and between 2% to 3% in the fourth quarter, so that the economy can still grow positively for 2020. (TGH/EN)
Translated by: Estu Widyamurti
Reviewed by: M. Ersan Pamungkas