Fiscal Refinement Towards 3 Percent Of GDP Gets International Recognition: Indonesia's Recovery Fast

JAKARTA - The government through the Ministry of Finance (Kemenkeu) claims that efforts to revitalize the State Revenue and Expenditure Budget (APBN) have received appreciation from the international community.

Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, said that Indonesia's macro and fiscal policy management strategy was deemed appropriate to control the pandemic and restore the economy.

“In the IMF report, Indonesia was highlighted as a country that was quite successful without compromising its medium-term financial and fiscal stability. They also appreciate that our economic recovery is fast," he said in a press statement, Wednesday, January 26.

According to Febrio, Indonesia's fiscal consolidation towards a state budget deficit of 3 percent of GDP in 2023 is a very strategic step.

"The IMF views this policy as making Indonesia more credible in the eyes of market players," he said.

To note, the global financial institution projects that the Indonesian economy will grow by 5.6 percent this year and strengthen to 6.0 percent in 2023.

"Even so, they still advise to be alert to an increase in a number of external risks, such as a new wave of the spread of COVID-19, increasing global inflationary pressures, tightening global financial markets," said Febrio.

Furthermore, Sri Mulyani's subordinates also explained that in handling the pandemic and Indonesia's economic recovery, it was classified as successful in encouraging the strengthening of economic activity, so as to lift the performance of the 2021 State Budget.

State income has increased significantly, mainly contributed by the increase in tax revenue performance when compared to the 2021 tax revenue target. This causes the APBN deficit to be reduced to 4.65 percent of GDP, lower than the initial target of 5.7 percent of GDP.

"In addition, positive economic recovery is also obtained from debt that is maintained at a safe and well-managed level," closed Febrio.