finance minister Sri Mulyani Indrawati, stated that 2019 State budget deficit will be widen to 2.2 percent of gross domestic product (GDP) amid the global uncertainties - Photo by President Office

JAKARTA (TheInsiderStories) – Indonesia’ finance minister Sri Mulyani Indrawati, stated that 2019 State budget deficit will be widen to 2.2 percent of gross domestic product (GDP) amid the global uncertainties. The initial planned the deficit targeting 1.93 percent of the GDP.

The widening of the deficit, she said, was due to global uncertainties that were pressing the Indonesian economy. Consequently, the State revenues is not affordable to meet the state spending.

“I have issued a ministerial decree to widen the deficit and need more financing. (The amount) is not too large, we will continue to combine with a combination of domestic and international,” she said yesterday at the State Palace.

Followed the development, yesterday, the ministry has issued dual-currency bonds with total amount US$2.1 billion, in American Dollar and Euro-denominated. Other financing its expecting come from bilateral loans or other source of funds.

Director general at the ministry, Luky Alfirman, explained, with these depressed economic conditions, the country need stimulus so it does not sink deeper. One solution, he said, by rise the funds and spending to be able to finance the economy. 

At the same day, governor of Bank Indonesia (BI) Perry Warjiyo sees, this year’ current account deficit (CAD) will remain under control in the range of 2.5 -3.0 percent of GDP. The same range will also be occur next year, he adds.

The governor rated that the CAD is still under control, because exports have begun to improve in several sectors, such as garments and automotive, even though other sectors still recorded negative growth.

In addition, imports also declined in line with various policy measures undertaken by the government. It was also supported by the large inflow of foreign capital in this quarter, he noted.

“BI will strengthen policy synergies with the government and related authorities to improve external resilience, including to increase FDI,” said the governor.

Written by Staff Editor, Email: theinsiderstories@gmail.com