Sri Mulyani Says Indonesia Is Better Than The US, France, Germany, And China In The Matter Of State Debt

Minister of Finance, Sri Mulyani. (Photo: Instagram @smindrawati)

JAKARTA - Finance Minister Sri Mulyani Indrawati stated that Indonesia's economy, which contracted by 2.07 percent (year on year) in 2020, was still relatively moderate compared to countries that were members of the G20 and ASEAN.

"If we look at the economic conditions in Indonesia, Indonesia is actually still relatively moderate compared to countries, both the G20 and ASEAN", she said, quoted from Antara, Tuesday, February 16.

Sri Mulyani said this shows that the government is able to deal with COVID-19 as well as its effects so that the effects experienced by Indonesia are not as deep as other countries.

"There are countries that are better than us such as Vietnam, China, and South Korea but most of the G20 countries or ASEAN countries, they are much deeper in the economic impact of the COVID-19 hit", she said.

She said that so far, the government has established steps by prioritizing the principle of prudence so that the economic contraction is quite moderate and the state budget deficit is 6 percent, also relatively smaller than other countries with more than 10 percent.

She explained that the higher deficit shows that the debt they have is also increasing, such as the deficit in the United States (US) approaching 15 percent and France at 10.8 percent.

"What does this mean? In just one year, these countries have their national debt soaring more than 10 percent, while Indonesia can remain in the range of 6 percent", she explained.

Not only that, but she mentioned that many developed countries whose government debt has exceeded the value of Gross Domestic Product (GDP) such as the US by 103 percent, France more than 118 percent, Germany 72 percent of GDP, China almost 66 percent, and India close to 90 percent.

Meanwhile, Indonesia also experienced an increase in debt, but the ratio to GDP was at the level of 38.5 percent so that it was still in a prudent position compared to developed countries and ASEAN such as Malaysia 66 percent, Singapore 131 percent, Philippines 54.8 percent and Thailand 50 percent.

"We estimate (Indonesia's debt) will be close to 40 percent of GDP but once again Indonesia is still relatively prudent", she said.

However, Sri Mulyani emphasized that the government will continue to restore the national economy through the State Budget and other instruments including from the monetary side.

The 2021 State Budget (APBN) expenditure will reach IDR 2.750 trillion including Ministry/Institution (K/L) expenditure IDR 1.059 trillion, IDR 910 trillion non-K/L expenditure, and IDR 780 trillion transfers to local governments.

"This is our provision to continue to maintain national economic recovery and to maintain the health of the State Budget and our economy", she said.