3 Percent Budget Deficit, Sri Mulyani Ogah Jor-Joran Utang Debt Interest Next Year

Illustration (Photo: Doc. Antara)

JAKARTA - The government through the Minister of Finance (Menkeu) Sri Mulyani emphasized that the management of the State Budget will re-implement fiscal discipline to levels below 3 percent of GDP in 2023. This is in accordance with the constitutional mandate.

On the basis of this mandate, the government will carry out a number of strategic steps, including related to projected financing.

According to the Minister of Finance, the current uncertainty tends to increase commodity prices and also the high potential for capital outflows.

This must be anticipated by reducing the deficit because if our deficit is large, the market will see a high demand for financing there. As a result, we can be hit by a high cost of funds," he said through a digital channel on Wednesday, September 7.

For this reason, the Minister of Finance explained that Indonesia must avoid the risk of debt vulnerabilities that could disrupt the economy in the future.

"So it seems that now in various countries that face the risk of high debt management because it is considered fiscal and unsustainable, they have to pay a very large fee," he asserted.

For information, in Law Number 2 of 2020 concerning State Finance, it is stated that the limit of the state budget deficit must return to a maximum level of 3 percent after previously being widened to anticipate the impact of the pandemic.

VOI noted that the total government debt until July 2022 was IDR 7,163.1 trillion or the equivalent of 37.9 percent of gross domestic product (GDP). This level is still safe when referring to the constitutional regulation of Law Number 17 of 2003 which stipulates debt restrictions cannot be more than 60 percent of GDP.

Meanwhile, the realization of this year's debt withdrawal as of July 2022 was only IDR 196.7 trillion or 23.4 percent of the target of IDR 840.2 trillion in Presidential Regulation 98/2022. This low figure cannot be separated from the steady performance of the state budget which benefits a lot from windfall revenue.

Meanwhile, in the 2022 State Budget Bill, the government plans a debt withdrawal of IDR 598.2 trillion, equivalent to 2.85 GDP.