Faisal Basri Talks About The Seriousness Of The State Budget Deficit If This Happens

Indef's senior economist, Faisal Basri. (Photo: Kemenkominfo)

JAKARTA - President Joko Widodo (Jokowi) assesses that the 2020 budget deficit will be financed by safe sources. According to him, the APBN will also be managed carefully, credible, and measurably.

Jokowi revealed this in the handing over of the report on the results of the examination of the 2020 central government financial statements aka LHP LKPP 2020 from the Supreme Audit Agency (BPK) on Friday, June 25, 2021.

"The budget deficit is financed by utilizing safe financing sources," he said.

University of Indonesia Senior Economist Faisal Basri gave his views regarding Jokowi's statement. According to this senior economist at Indef, 87 percent of government debt is in the form of bonds circulating in the market.

"It can't be rescheduled. If there is a sell-off, we can," said Faisal on his Twitter account, quoted Monday, June 28.

Based on the Central Government Financial Report (LKPP) of the BPK, the realization of state revenues and grants in 2020 was reported at Rp1,647.78 trillion, or reaching 96.93 percent of the budget.

This consists of tax revenues of Rp1,285.14 trillion, non-tax state revenues of Rp343.81 trillion, and grants of Rp18.83 trillion. Tax revenues as the main source of APBN funding, only reached 91.50 percent of the budget or decreased by 16.88 percent compared to tax revenues in 2019 of Rp1,546.14 trillion.

Realization of state spending in 2020 was reported at Rp2,595.48 trillion or reaching 94.75 percent of the budget. This consists of central government spending of Rp1,832.95 trillion, transfers to the regions of Rp691.43 trillion, and village funds of Rp71.10 trillion.

Meanwhile, the 2020 budget deficit was reported to be Rp. 947.70 trillion or 6.14 percent of gross domestic product (GDP). However, the realization of financing reached Rp1,193.29 trillion or 125.91 percent of the deficit value so that there was a Remaining Budget Financing (SiLPA) of Rp245.59 trillion.

The realization of this financing was mainly obtained from the issuance of state securities, domestic loans, and foreign financing of Rp1,225.99 trillion. This means that the 2020 debt procurement exceeds the financing needs to cover the deficit.