Sri Mulyani's Subordinates Talk About The Sri Lankan Crisis Due To Debt, What Will Happen To Indonesia?

Illustration (Photo: Doc. Antara)

JAKARTA – The Ministry of Finance responded to the financial crisis that occurred in a friendly country Sri Lanka recently. Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, said that Indonesia has fundamental characteristics that are different from the South Asian countries.

According to him, Indonesia has a fairly strong economic fundamental structure at this time. In fact, Febrio claimed that it had been owned by Indonesia long before the COVID-19 pandemic.

This indication is reflected in the ratio of Indonesia's debt to gross domestic product (GDP) or debt to GDP ratio in December 2019 which was 30 percent and is currently around 40 percent. Just so you know, in Law Number 17 of 2003 concerning State Finances it is mandated that the debt limit to GDP is 60 percent.

"Compared to Sri Lanka in 2019 they have debt already 87 percent of their GDP. This is almost three times ours", said Febrio when stating the media crew, quoted on Friday, June 24.

Sri Mulyani's subordinates also explained that when examined from the aspect of the state budget deficit (APBN), Indonesia always set an average target of below 3 percent of GDP.

"Before the pandemic, Sri Lanka's fiscal deficit was already 9.6 percent", he said.

Therefore, Febrio assesses that the Indonesian economy has good resilience in the face of the pandemic crisis and global turmoil that is currently hitting.

"First is the management of our macro policies in fiscal which have been very careful and disciplined for a long time following very strict state financial management rules", he said.

Meanwhile, in the monetary aspect, he appreciated the steps taken by Bank Indonesia (BI) which continued to take conservative, independent, and credible steps.

"BI is quite disciplined in maintaining inflation stability with the target for the last five years being kept below 5 percent. This has made various international institutions call Indonesia a strong country in facing the global crisis", he explained.

Febrio did not forget to explain the windfall effect of commodity price movements which are in a high trend.

"We are currently benefiting from the trade side because Indonesia is an exporter of many commodities, such as nickel, copper, coal, and also CPO which makes state revenues high as well", he said.

"So it's not really fair to compare Indonesia with Sri Lanka", closed Febrio Kacaribu.