As A Result Of COVID-19, Willing Or Not Willing To Widen The 2020 State Budget Deficit Of IDR 125 Trillion

Press Conference on the Second Economic Stimulus for Handling the Impact of COVID-19, in Jakarta, Friday 13 March. (Mery Handayani / VOI)

JAKARTA - Finance Minister Sri Mulyani predicts that the 2020 national budget (APBN) deficit will widen to 2.5 percent or IDR 125 trillion. The widening of the deficit was due to the government's support to minimize the negative impact of the corona virus or COVID-19 on the Indonesian economy.

"We have already explained the fiscal and non-fiscal stimuli. We predict that our APBN deficit will be relaxed by 2.5 percent or Rp 125 trillion," he said during a press conference at the Office of the Coordinating Ministry for Economic Affairs, Gambir, Jakarta, Friday, March 13.

Sri Mulyani explained that this figure was up from the planned 2020 state budget deficit of 1.76 percent of total GDP (gross domestic product). The funds are used to provide stimulus packages volume I and II to be injected to businesses and the public.

According to him, the Ministry of Finance is open to all possibilities that will happen. This is because the additional deficit of Rp 125 trillion occurred because the government did not put a brake on spending, but revenues actually decreased.

"Shopping has not been brake, but revenues have decreased. We are doing relaxation, so that the deficit is getting bigger," he said.

Moreover, said Sri Mulyani, the APBN had a supportive impact on the Indonesian economy by 0.8 percent of the total GDP. However, it is possible that the government will issue further stimulus.

"At the time of stimulus I, we saw that the risk was limited only to the hotel and restaurant sector. However, the status of the Corona virus becoming a world pandemic has a greater risk impact. This is not the last announcement, we are open to researching all possibilities," he said.

As is well known, the government issued a number of fiscal policies that were given to industry and employees. Some of the incentives include the increase in the basic food card allowance from IDR 150 thousand to IDR 200 thousand per month.

Then, the government also provides a discount on airplane tickets of 30 percent for 10 predetermined destinations. This policy is included in the fiscal incentive package volume I. The total value disbursed by the government is Rp.10.3 trillion.

In addition, income tax (PPh) payment exemption (PPh) for 6 months for manufacturing industry employees, postponement of PPh Article 22 and PPh Article 25. These incentives are included in the fiscal incentive package volume II with a total value of Rp. 22.9 billion.