Lower income, rising debt expected as Indonesia unveils extra stimulus

Indonesian Finance Minister Sri Mulyani Indrawati (centre), accompanied by Deputy Finance Minister Mardiasmo (left), talks to a legislator after presenting fiscal policy principles as part of the 2020 state budget in Jakarta in this file photo. - Antara

JAKARTA (The Jakarta Post/ANN): The government’s big-check fiscal stimulus to bolster purchasing power and tourism- and trade-related industries amid the coronavirus (Covid-19) outbreak will reduce state revenue and raise debt levels, economists say. They have called for productive spending to support the economy.

Center of Reform on Economics (CORE) Indonesia research director Piter Abdullah said the planned stimulus packages would “no doubt” increase debt levels and widen the budget deficit, and he called on the government to manage the budget efficiently while providing the much-needed stimulus.