JAKARTA (TheInsiderStories) – After raised fresh funds from the global bond issuances, now Indonesia looking a multilateral loans around US$7 billion, said the central bank governor this week. The funds to fight the COVID-19, its expecting comes from the World Bank, Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB).
According to Bank Indonesia (BI) governor, Perry Warjiyo, the funds would be used to finance the Southeast Asia largest economy’ widening budget deficit to 5.07 percent of gross domestic product (GDP). He also said, the fresh funds to prevent a greater health crisis and economic meltdown from the COVID-19 outbreak.
As reported, Indonesian government need funds Rp405.1 trillion (US$25.31 billion) to fight the pandemic and Rp539 trillion to finances the widening of 2020 State Budget deficit. According to directorate general at finance ministry, Lucky Alfirman, in the middle volatile markets, every governments need to do maneuver to protect the domestic economy.
He conveyed, Indonesia still open to reaches the global market by issuing global SUKUK, Samurai Bond or Eurobond.
“Incoming bid is still good even the trend going down. With conditions like this we will see all various opportunities to exist. We also talked with multilateral agency such as ADB and the World Bank,” he told reporters through a video conference on March 18.
Beside, Alfirman stated, the government still pocketing the remaining budget Rp 1.3 trillion to cover the deficit and demand for placement is still big. If the conditions getting worst, he continued, the government have other options through Financial System Stability Coordination Forum, Crisis Management Protocol, and other policies.
Earlier, the government set economic growth at 5.3 percent, inflation at 3.1 percent, the average exchange rate of Rp14,000 per US Dollar, the state treasury coupon rate of 5.4 percent, oil price US$63 barrel. oil lifting around 755 thousand barrels, and lifting of natural gas at 1.19 million barrels.
Then, the state revenues are set around Rp2,223 trillion and the government spending Rp2,540.4 trillion. With these assumptions, the government expect an unemployment rate at 4.8 – 5.0 percent, poverty rate 8.5 – 9.0 percent, GINI ratio of 0.375 to 0.380, and a human development index of 72.51.
But now, the government revised down the economic growth target to 2.3 percent of GDP. President Joko Widodo has signed lieu of laws of the 2020 State Budget revision and has been sent the bill to parliament and now awaits for the approval.
In details, he explained, the additional spending will distributes for health spending, like purchase of personal protective equipment, test kits, referral hospitals, incentives for doctors, other medical workers, ventilators and death insurances with total amounts Ro75 trillion.
Then Rp110 trillion for social protection like poverty alleviation program for 10 million beneficiaries, cards groceries 20 million families, pre-work cards for 2.6 million recipients, exemption from electricity costs for three months period, basic food and logistical support.
In addition, Rp70.1 trillion for tax and stimulus incentives. While, Rp150 trillion for fan economic recovery program, including credit restructuring, guarantees and financing of the business world for six months.
For the non-fiscal sector in ensuring the availability of goods, including industrial raw materials, the government applies a simplified export ban, simplification of a limited import ban, the acceleration of services in the import-export process through the national logistics ecosystem.
In total the government spending in 2020 will rises form initial plans Rp2,540.4 trillion to Rp2,945.5 trillion. While the revenues its expecting lowers then initial target Rp2,233.2 trillion.
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