JakartaGlobe-June 11
Finance Minister Sri Mulyani Indrawati claims that Indonesia’s management of the state budget deficit is better compared to other countries. “While many countries worldwide witnessed a surge in deficits during Covid-19, Indonesia stands out as one of the few that successfully decreased its fiscal deficit,” Sri Mulyani informed members of the Regional Representative Council in Jakarta on Tuesday. She pointed to India, where the deficit skyrocketed from 7.7 percent of Gross Domestic Product (GDP) to 12.9 percent due to the pandemic, and the United States, where it surged from 5.8 percent to 13.9 percent. In Indonesia, the state budget deficit rose from 2.2 percent to 6.1 percent of GDP in 2019 and 2020, respectively. “We raised the deficit during that period to support the public and economic recovery. However, we swiftly managed to decrease it to a relatively small level, while many other nations continue to grapple with high deficit levels,” she elaborated. Despite the challenges, Indonesia managed to reduce the deficit significantly within three years after the pandemic. By 2023, the deficit had been lowered to 1.6 percent. The state budget deficit for 2024 has been approved by the House of Representatives at 2.29 percent of GDP. For 2025, the Ministry aims for a deficit ranging from 2.45 percent to 2.82 percent. This accomplishment contrasts sharply with other countries, with India recording an 8.6 percent deficit and the US at 8.8 percent in 2023. Regarding debt ratios, Sri Mulyani emphasized Indonesia’s success in maintaining relatively low levels, ranging from 39 percent to 40 percent of GDP from 2020 to 2023.
In contrast, other countries reported significantly higher debt-to-GDP ratios, with India ranging from 81 percent to 88 percent and the US exceeding 100 percent. “Nevertheless, we are committed to maintaining our debt ratios at manageable levels,” the Finance Minister affirmed. Read more at: https://jakartaglobe.id/business/sri-mulyani-indonesia-leads-in-fiscal-deficit-reduction-among-pandemichit-nations
