Introductory Remarks of President of the Republic of Indonesia through Teleconference on Draft of the State Budget Posture for 2021 Tuesday, 28 July 2020 at the Bogor Presidential Place, West Java Province

Bismillahirrahmanirrahim.

 Assalamu’alaikum warahmatullahi wabarakatuh.

Good afternoon,

May peace be upon us all.

Distinguished Vice President,

Distinguished Ministers,

Ladies and Gentlemen,

Today we will discuss Draft of the State Budget Posture for 2021.

First of all, let me remind you that global economic condition is very dynamic and full of uncertainty. A number of international financial agencies always revise their predictions on global economic growth in 2020 and 2021. It indicates that the economy is full of uncertainty though the International Monetary Fund (IMF), the World Bank, and Organization for Economic Cooperation and Development (OECD) projected that global economic to show a positive growth in 2021. Not to mention that the IMF has projected global economic growth to reach 5.4 percent, while the OECD has projected the economy to hit a range of 2.8 to 5.2 percent. If the projection is realized, Indonesia’s economic growth will be higher than global economic growth. Indonesia is projected to be among group of countries with the fastest economic recovery after China. We must be grateful if the projection can be materialized. Nevertheless, we must remain vigilant against the risk of second wave and the ongoing global economic uncertainty in 2021.

Secondly, indicators for macro economy must be calculated carefully and positively. We must be optimistic yet realistic at the same time by calculating the latest conditions and projections. We must also set priority for 2021 and ensure that deficit expansion for State Budget 2021 must be focused on funding economic recovery acceleration and strengthening transformations on several sector, particularly reforms in the fields of health, food, education, and digital transformation.

Third, we are aware that the State Budget only contributes to less than 14.5 percent of our Gross Domestic Product. Therefore, in this time of crisis, Government expenditures will become the main instrument to create leverage power. To recover private sector, and micro, small, and medium-sized enterprises, the State Budget that is used right on target must stimulate the economy.

Lastly, I need to reiterate that in facing this difficult time, we should not put aside our big agendas, national strategic agendas, and measures to escape the middle income trap. Since 1 July 2020, Indonesia is officially an upper-middle income country. However, we all know that there is a long way to escape the middle income trap.

And that concludes my remarks.

Thank you.

Translated by : Rany Anjany

Reviewed by : Yuyu Mulyani