Illustrative image (Photo: VNA)Jakarta (VNA) - Indonesia’s new debt is expected totriple this year as the government struggles to fund its fight against the COVID-19pandemic.
Accordingto the newly enacted Presidential Regulation No. 54/2020 on the 2020 statebudget revision issued on April 3, the Indonesian government has increased deficitspending to 1 quadrillion Rp (61.5 billion USD) this year, a jump of 286 percentfrom the initial target of 351.9 billion Rp.
The government plans to offer sovereign debt papers worth 549.6 trillionRp, an increase from the initial 389.3 trillion Rp, while also planning to raise450 trillion Rp in “pandemic bonds”.
Finance Minister Sri Mulyani Indrawati said on April 6 thatthe government would look for safe financing sources, including the option touse the endowment fund for education (LPDP) as well as accumulated cash surplus(SAL), but said that “would not be enough”.
President Joko Widodo has announced additional statespending worth 405.1 trillion Rp to financeIndonesia’s battle against the novel coronavirus SAS-CoV-2 pandemic. The new allocationwill be used specifically for healthcare, social safety net and businessrecovery programmes.
The state budget revision now targets 1.76 quadrillionRp in revenue, lower than the 2.23 quadrillion Rp previously set out in the2020 budget.
Expenditure, meanwhile, jumps to 2.61 quadrillion Rp from the 2.54quadrillion Rp targeted previously. The government has widened its state budgetdeficit beyond the previous 3-percent-of-GDP cap to around 5 percent this year,in line with a new government regulation in lieu of law (Perppu) to lift thelegal limit./.
VNA
