The Government Still Believes That Economic Growth Can Reach 5 Percent, Vaccination Is The Way

Illustrated. (Photo: VOI)

JAKARTA - The government, through the Ministry of Finance (Kemenkeu), is optimistic that economic growth this year will be in the range of 4.5 percent to 5.3 percent.

Ministry of Finance's Expert Staff for State Expenditure Kunta Dasa Wibawa Nugraha said that the economic growth projection is expected to be achieved accompanied by domestic pandemic control.

"The government's priority program is of course vaccination. But we also need to convey that the implementation of health protocols must be implemented”, he said in a webinar Wednesday, February 24.

Kunta added that one thing the Ministry of Finance is currently focusing on is optimizing the national economic recovery fund or PEN. According to him, a fiscal expansionary policy could reduce the weakening impact of the COVID-19 pandemic in the economic sector.

"The government has issued various stimuli, even today the state still bears all the costs of caring for people affected by the pandemic", he said.

In detail, Kunta explained that the government has budgeted PEN funds of up to IDR 699.43 trillion. This figure is up 21 percent compared to the temporary realization of PEN 2020. As for the health sector, the budget jumped the highest, namely 178 percent from IDR 63.51 trillion to IDR 176.3 trillion.

"This is not only for treating patients but also for prevention, such as testing, tracing, vaccination, and other treatments related to infrastructure", he said.

Prior to that, on Tuesday, February 23, Minister of Finance Sri Mulyani said that the realization of state spending as of January 2021 amounted to IDR 145.8 trillion, or 5.3 percent of the 2021 state budget (APBN) target. This value was recorded far higher than the achievement for the January 2020 period.

"The absorption which is higher than last year shows a good start to boost economic growth", he said in a virtual press conference of APBN.

Meanwhile, the realization of central government spending until the close of January 2021 reached IDR 94.7 trillion, or 4.8 percent of the 2021 APBN target, which is 32.4 percent higher than the same period last year.

He added that last month's realization was mainly driven by capital expenditures, social assistance, and funds for the national economic recovery sector (PEN).

"The most important thing in the January period APBN is the APBN expenditure side because the APBN fiscal instruments that accelerate recovery, and it can be seen in the spending, all of them are positive growth compared to January last year", added the Minister.