Many Countries Make Debt, Sri Mulyani Predicts World Financial Markets Will Be Fluctuating After The Pandemic

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani predicts that world financial market conditions will experience strong dynamics in the next few years. This assumption is based on the number of countries seeking financing to deal with the impact of the COVID-19 pandemic on their territories.

"The whole world is experiencing a countercyclical, which means that the deficit is increasing and public debt is increasing," he said in a virtual press conference, Thursday, April 29.

According to the Minister of Finance, all nations in the world continue to prioritize handling the pandemic as their main focus while concentrating on reducing the impact on the economic sector.

"This is a global problem facing the world today, once again in the world," he said.

The statement was made in response to the government's budget deficit that was widening in a pandemic year.

"For this reason, Indonesia needs to maintain and manage the state budget to get back healthy. However, we also know that the APBN is still needed to recover the economy, it is still needed to achieve important development goals, "he explained.

For information, the 2021 State Budget is targeted for state revenue of IDR 1,743 trillion, with an expenditure of IDR 2,750 trillion. This composition resulted in a deficit of IDR 1,000 trillion or 5.7 percent of gross domestic product (GDP).

Meanwhile, for the 2022 State Budget plan, next year's state revenue is estimated to be around IDR 1,823 trillion, with the expenditure sector stated at IDR 2,631 trillion. From this estimate, it is found that the budget deficit will be in the range of IDR 800 trillion or the equivalent of 4.5 percent of GDP.

This picture is still better than the budget deficit of the United States, which amounted to 15.6 percent of GDP, and China, which amounted to 11.9 percent.

From the Southeast Asian environment, Indonesia is still better than Singapore with a deficit of 10.8 percent, and the Philippines with 8.1 percent.

"Compared to other countries, both in the G20 and ASEAN, Indonesia's debt and deficit is still better," he said.

Quoting data from Bank Indonesia, Indonesia's foreign debt (ULN) in February 2021 amounted to 422.6 billion US dollars or the equivalent of Rp6,145.7 trillion (exchange rate: Rp14,542).

The book was an increase of 4.0 percent compared to the same period in 2020, or higher than January 2021's growth which was recorded at 2.7 percent.

Indonesia's external debt in February 2021 remained under control, as reflected in the maintained ratio of Indonesia's external debt to GDP at around 39.7 percent. Meanwhile, Law Number 17 of 2003 stipulates that the debt ratio limit should not exceed 60 percent of GDP.