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No extra debt despite emergency curbs, lower growth, govt vows
The government plans to shift around funds to finance relief efforts without exceeding this year's budget deficit limit.
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Finance Minister Sri Mulyani Indrawati delivered her remarks after the signing of a memorandum of understanding and the cooperation agreement for the Coordination of the Acceleration and Electronification of Regional Government Transactions at the Office of the Coordinating Ministry for Economic Affairs, Jakarta, Thursday (02/13/2020). The agreement aims to increase accountability in the management of state finances and minimize the potential for financial leakage in local governments. (Antara/M Risyal Hidayat)
T
he government has vowed to maintain its annual budget deficit target to minimize economic pressure as it prepares to augment relief programs alongside the imposition of emergency public activity restrictions (PPKM Darurat).
Finance Minister Sri Mulyani Indrawati said on Friday that the government had raised the budget for healthcare by 7.6 percent to Rp 185.98 trillion (US$12.79 billion), for social protection by 0.55 percent and for business incentives by 10.75 percent to expand COVID-19 relief efforts.
To compensate, the ministry slashed the budget for small business assistance and for industry recovery “priority programs” to ensure the government did not exceed its annual budget deficit target of 5.7 percent of the gross domestic product (GDP). Exceeding the target could add more economic pressure amid a muted GDP growth outlook as a result of the new round of restrictions.
“So we will shift funds around. We consider our budget flexible. We can increase funds in some areas then [decrease them] for other programs,” said Sri Mulyani.
“The issue is not about the availability of the budget but its disbursement, as we want to keep improving governance and reaching the right recipients.”
Mobility restrictions will be tightened across Java and Bali from Saturday to July 20 to stem a second wave of COVID-19 that has brought the country’s healthcare system to the brink of collapse.
Read also: Fears linger emergency COVID-19 curbs may fall short
