Jokowi's Perppu To Stabilize The Economy Amid The Countermeasures Of COVID-19

President of the Republic of Indonesia, Joko Widodo. (Photo by: Setkab)

JAKARTA - President Joko Widodo (Jokowi) has confirmed to issue a Government Regulation in Lieu of Law (Perppu) to change the basic rules for state finances in the national income and expenditure budget (APBN). As is known, the 2020 state budget deficit limit was 3 percent, but now more than that is allowed.

Jokowi said that this Perppu was issued in anticipation of a possible state budget deficit this year, which is estimated at 5.07 percent. This is due to an increase in government spending to tackle the spread of the corona outbreak or COVID-19, including the impact it has on both health and economy.

"It requires relaxation of the APBN deficit policy of above 3 percent. However, this deficit relaxation is only for three years, namely for 2020, 2021 and 2022," he said in a video conference with journalists, Tuesday, March 31.

For information, the limitation of state financial management itself is contained in Law no. 17 of 2003 concerning State Finance. This Perppu will only be valid for three years. After that the fiscal deficit limit remains 3 percent.

"After that we will return to fiscal discipline with a maximum deficit of 3 percent starting in 2023," he explained.

The former governor of DKI Jakarta emphasized that the Perppu on state financial policy and financial system stability has been signed by him and will be promulgated. Jokowi also requested that it be carried out in the fastest possible time.

"We will convey to the Indonesian Parliament to get approval into law," he said.

For your information, to deal with COVID-19, the government is estimated to spend additional spending in the 2020 APBN to reach IDR 405.1 trillion.

Jokowi said that the total budget allocated was IDR 75 trillion for health spending, IDR 110 trillion for social protection, IDR 70.1 trillion for tax incentives and people's business credit stimulus (KUR), and IDR 150 trillion for financing the national economic recovery program.