Sri Mulyani to Lower Fiscal Stimulus for Business Sector Next Year

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Markus Wisnu Murti

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  • Finance Minister Sri Mulyani. TEMPO/M Taufan Rengganis

    Finance Minister Sri Mulyani. TEMPO/M Taufan Rengganis

    TEMPO.CO, JakartaFinance Minister Sri Mulyani Indrawati said fiscal stimulus for the business sector would be reduced next year, assuming that the sector had begun to recover from the impact of the COVID-19 pandemic.

    “We will continue to support the business but in a more measurable way. This means we will lower the support, hoping that the demand will return to normal next year,” said Sri in an event of Asian Development Bank on Friday, September 18.

    Sri added the government would ensure the recovery of business by complementing fiscal support policy with reformation and improvement of the investment climate. One of the efforts includes the completion of the omnibus law on job creation, which was expected to drive investors confidence in investing in Indonesia.

    The government has projected a lower deficit of the State Budget (APBN) next year at 5.7 percent of the Gross Domestic Product (GDP). This year’s budget deficit is expected at 6.3 percent.

    “We are giving a signal that we will continue to support this recovery because this is still early. But we will start consolidating our fiscal system by showing a lower deficit,” Sri explained, adding that she would re-manage sectors prioritized in the government's budget.

    Sri Mulyani underlined that the health sector would become the highest priority in next year’s budget, including fund allocation for the procurement of the COVID-19 vaccine, which was estimated to be quite significant. The government will also prioritize the social safety net for the public.

    The former managing director of the World Bank said that Indonesia's economic recovery depended heavily on COVID-19 mitigation, particularly on how the government controls the spread of the disease.

    Read: Sri Mulyani Predicts Deeper Economic Contraction as PSBB Reimposed

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