The Story Of Minister Of Finance Sri Mulyani Getting A Rating Agency Statement Regarding The Billing Of The High State Budget Deficit

Minister of Finance Sri Mulyani (Photo: Capture Youtube screen of the Bankir Indonesia Association)

JAKARTA Minister of Finance (Menkeu) Sri Mulyani conveyed various stories related to a number of steps taken by the government in managing state finances during the early days of the COVID-19 pandemic. According to him, the developing situation is impossible to carry out fiscal instruments in normal mode.

This is because the economy is certain to decline due to restrictions on mobility which have an impact on the decline in state revenues. On the other hand, the spending sector is getting higher because it must guarantee public health and provide various social protections.

"When economic activity is paralyzed in 2020, the only one who works and dares to appear is the state budget. He stands at the forefront to face the biggest risk. Even though we know state revenues are falling," he said while speaking at the CEO of the Banking Forum on Monday, January 9.

According to the Minister of Finance, because they face an extraordinary situation, it is certain that the APBN will experience great pressure. For this reason, the government and the DPR agreed to open a budget deficit of more than 3 percent through Law Number 2 of 2020.

"This is to protect the community and our deficit has indeed penetrated above 6 percent. Then in 2021 the economy will begin to recover and the deficit will improve," he said.

The state treasurer revealed that Law No. 2/2020 mandates the deficit to return to normal levels after three years of running, or in the implementation of the 2023 State Budget.

"At that time I was asked by agency ratings (debt rating), could you not for three years down below three percent? Will this (Indonesia) be like many countries in Latin America? Once you feel good with the deficit above 3 percent then you will be addicted to the next," explained Sri Mulyani, imitating the skepticism of agency ratings.

"In fact, we can close (the deficit widening) by not about 3 percent, but far below 3 percent last year," he said.

For information, the posture of the 2022 State Budget is closed with a budget deficit of 2.38 percent. This figure means that it has entered the normal level even before three years after the mandate of the law. Meanwhile, the deficit in the 2023 State Budget is designed at 2.84 percent of GDP.