JAKARTA - Entering the three months of the corona virus pandemic or COVID-19 found in Indonesia, the deficit in the National Budget (APBN) is projected to exceed IDR 1,028 trillion, or widened to 6.27 percent of gross domestic product (GDP).
This figure is greater than the deficit set by the government through Presidential Decree Number 54 of 2020 concerning Posture Changes and Details of the State Budget and Expenditures for the 2020 Fiscal Year. The Presidential Decree states that the amount of the budget deficit is estimated at 5.07 percent of the Gross Domestic Product (GDP) or is in the range of IDR 853 trillion.
Finance Minister Sri Mulyani explained that the widening deficit was due to additional state spending which included additional interest subsidies for MSME players as well as an extension of electricity tariff discounts to social assistance.
"The APBN has a deficit of Rp1,028.6 trillion or 6.72 percent in order to bail out and encourage the economy to withstand the pressure of COVID-19 and it is hoped that it can recover," he said in a video conference with journalists, Monday, May 18.
Sri Mulyani explained that state revenue this year is estimated to decline from the government's estimate in Presidential Decree 54/2020 to IDR 1,691.6 trillion from IDR 1,760.9 trillion. Meanwhile, tax revenues were only IDR 1,404.5 trillion from IDR 1,462.6 and Non-Tax State Revenues (PNBP) to IDR286.6 trillion from IDR297.8 trillion.
Meanwhile, he continued, state spending actually increased to Rp2,720.1 trillion, from previously only Rp2,613.8 trillion. Government spending to Rp1,959.4 trillion from Rp1,851.1 trillion. However, Transfers to Regions and Village Funds (TKDD) fell to Rp. 760.7 trillion, from Rp. 762.2 trillion previously.
As for the addition of fiscal stimulus for the sake of national economic recovery, among others, MSME interest subsidies amounting to Rp.34.2 trillion, discounted electricity rates from six to Rp.3.5 trillion, and social assistance (bansos) in cash and staples until the end of this year to Rp.19.62 trillion.
"To be able to attract a deficit of Rp1,028 trillion or 6.27 percent, the financing and procurement of securities which have been regulated in the Perppu and the SKB of the Ministry of Finance with Bank Indonesia will be carried out," he said.
Not only that, Sri Mulyani revealed, the APBN deficit widened because the government also provided financing in the form of investment of IDR 25.27 trillion in the form of State Capital Participation (PMN) to a number of state-owned companies.
In addition, there are also bailout funds for working capital for several SOEs amounting to Rp32.65 trillion, and compensation payments for economic recovery to three SOEs amounting to Rp94.23 trillion.
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