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Govt banks on unused 2022 funds to minimize borrowing next year
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Finance Minister Sri Mulyani Indrawati (Finance Ministry/-)
T
he government is in no hurry to spend unused funds budgeted for this year, planning instead to use them to beef up the state treasury and thus reduce its reliance on debt financing next year, as borrowing gets more costly amid soaring interest rates and heightened uncertainty.
Finance Minister Sri Mulyani Indrawati said on Thursday that the government was deliberately saving up some unused budget funds to be carried over to 2023, which would reflect in a high SILPA account at the end of this year.
“There will be volatility affecting financing in 2023, which is why we need to minimize the risk by maintaining a certain cash buffer,” Sri Mulyani told reporters during a press briefing broadcast through YouTube.
“As you can notice, our SILPA account is bigger; that’s because we are managing risks for the next fiscal year,” she added.
Read also: 2023 Budget Law aims for 2.84 percent shortfall to escape commodity-prices trap
The Federal Reserve (Fed) has raised its interest rate six times in a row, lifting borrowing costs to a multiyear high and prompting other central banks, including Bank Indonesia (BI), to maintain the gap by hiking their own benchmark rates.
The hike has sent yields soaring on government bonds of many countries, including Indonesia, making debt financing more costly. Indonesia’s 10-year government bond yield peaked at more than 7.4 percent in October, up from around 6.4 percent a year earlier.
