Sri Mulyani: Optimism Deficit Not Penetrate 5 Percent When Corona

[:en]Sri Mulyani: Optimism Deficit Not Penetrate 5 Percent When Corona[:]

Minister of Finance Sri Mulyani projects a 2020 State Budget (APBN) deficit of no more than 5 percent. This is because the government only has about 8 months left to spend and simultaneously deal with the corona virus.

For this reason, he ensured that the deficit level would not rise too high even if the government had to disburse a lot of funds to fight the corona virus in the country.

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“My estimate is only 4 percent-5 percent. It’s only 8 months, the ability to absorb is definitely limited,” Sri Mulyani said in a video conference, Wednesday (1/4).

“The deficit will not run anywhere too far,” said Sri Mulyani.

Even so, he said President Jokowi warned that the deficit above 3 percent did not last more than three years. That is, the deficit must return below 3 percent in 2023.

He admitted that it was indeed difficult to maintain a deficit of below 3 percent in the midst of difficult situations like now.

The reason is, the government has to rack my brain to protect the economy by releasing a lot of stimulus. When the economy fluctuates due to the corona virus.

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“Our revenue has also gone down because of many tax discounts to keep the industry from falling due to the corona virus. But shopping must still be spent,” Sri Mulyani explained.

It is known, Jokowi has signed a government regulation to replace the law (Perppu) as a legal umbrella for the relaxation of this year’s state budget deficit.

In the Perppu, the 2020 state budget deficit is projected to reach 5.07 percent.

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Meanwhile, Senior Sovereign Risk Group Analyst Moody’s Investors Service Anushka Shah said.

The government’s efforts to restore the fiscal deficit to below 3 percent in 2023 would be a benchmark to gain investor confidence.

“The recent parliamentary agreement to raise the ceiling will result in an expansion of the budget deficit to 5 percent of GDP. Allowing for greater fiscal space,” Shah said in his research.

With a wide fiscal space, the government has the leeway to provide more economic stimulus to help the company’s cash flow. And consumption of people affected by the corona virus.