Fiscal Must be Carefully Managed by the Government, President Jokowi Says

Ministers of the Working Cabinet at the DPR-RI Plenary Session, at Nusantara Building, Jakarta, Thursday (16/8). (Photo: Public Relations of Cabinet Secretary)

President Joko “Jokowi” Widodo confirmed that the 2019 State Budget financing will be carried out accountably.

The budget deficit and debt to GDP ratio will be controlled within the safe limits, in accordance with the provisions of  Law.

“Debt management should be carried out more prudently in order to reduce risks and costs, and directs its use more productively for development programs in education, health, infrastructure, social protection and regional development,” said President Jokowi when delivering the Bill of the State Budget (RUU APBN) of 2019 Fiscal Year, at the Indonesian House of Representatives (DPR-RI) Plenary Session, at Nusantara Building, Jakarta, Thursday (16/8).

The President emphasized that by 2019, the Government will continue to take a measured expansionary fiscal policy, in order to encourage a sustainable and equitable economy for the people.

Expansive fiscal policy which has done proportionally, explained the President, is to maintain fiscal sustainability in the future.

This is shown by smaller State Budget deficit, from 2.59 percent of GDP in 2015 to 2.12 percent in 2018, and will be reduced to 1.84 percent in 2019,” President Jokowi added.

He further explained that the controlled direction of the State Budget policy proves that the Government always manages fiscal carefully and responsibly, and expected to improve the welfare of the people to be more just and equitable.

The improvement of fiscal policy, the President continued, was also indicated by the primary balance deficit which in 2015 reached Rp 142.5 trillion, down to only Rp 64.8 trillion in 2018, and continue to go lower to Rp 21.7 trillion by 2019.

“With this fiscal policy, we hope to be able to achieve a balanced or surplus primary balance in the near future,” the President said.

In addition to reducing the budget deficit, in order to control additional debt, President said, the Government will also reduce budget financing in 2019 by 5.4 percent. This effort has been done consistently since 2018, and budget financing has been reduced by around 14.3 percent.

Meanwhile, President Jokowi admitted that in previous years, the Government was still experiencing increased financing due to fiscal expansion in order to stabilize and minimize the impact of falling commodity prices at that time.

However, with a number of policies, such as smaller State Budget deficit and primary balance deficit, realistic increasing income, increasing quality and targeted spending, as well as prudent and productive financing, President Jokowi expected that the State Budget will be fairer and more independent. (DNA / AGG / GUN / OJI / UN / ES) (STU/MMB/Naster)