JAKARTA, KOMPAS.com – Minister of Finance (Menkeu), Sri Mulyani Indrawati, stated that Indonesia’s economy, which contracted by 2.07 percent (yoy) in 2020, was still relatively moderate compared to countries that are members of the G20 as well as ASEAN.
“If we look at the economic condition of Indonesia, it is actually still relatively moderate compared to countries, both the G20 and ASEAN,” said Sri Mulyani during the 2021 TNI-Polri Leadership Meeting as quoted from the news. Among, Tuesday (15/2/2021).
Sri Mulyani said this shows that the government is capable of dealing with Covid-19, as well as its impact so that the effects experienced by Indonesia are not as deep as other countries.
“There are countries that are better than us, such as Vietnam, China and South Korea. However, most of the G20 countries or their ASEAN countries are much deeper in their economic impact due to the Covid-19 hit, “he said.
He said that so far the government has set steps by prioritizing the principle of prudence so that the economic contraction is moderate and deficit State Budget 6 percent, also relatively smaller than other countries with more than 10 percent.
He explained that the higher deficit shows that the debt they have is also increasing, such as the deficit in developed countries, namely the United States (US) approaching 15 percent and France 10.8 percent.
“What does this mean? These countries in just one year their state debt jumped by more than 10 percent while Indonesia was still able to maintain the range of 6 percent, “Sri Mulyani explained.
Not only that, he mentioned many developed countries whose government debt has exceeded the value of the Gross Domestic Product ( PDB) such as the US at 103 percent, France more than 118 percent, Germany 72 percent of GDP, China almost 66 percent, and India close to 90 percent.
Meanwhile, Indonesia also experienced an increase in debt, but the ratio to GDP was at the level of 38.5 percent, so it is still in position prudent compared to developed countries and ASEAN such as Malaysia 66 percent, Singapore 131 percent, the Philippines 54.8 percent and Thailand 50 percent.
“We estimate (Indonesia’s debt) will be close to 40 percent of GDP, but once again Indonesia is still relatively in a relatively cautious position. prudent, “Said Sri Mulyani.
However, Sri Mulyani emphasized that the government will continue to restore the national economy through the State Budget and other instruments including from the monetary side.
The 2021 APBN expenditure will reach Rp. 2,750 trillion including Ministry / Institution (K / L) expenditure of Rp. 1,059 trillion, non-K / L expenditure of Rp. 910 trillion and transfers to local governments reaching Rp. 780 trillion.
“This is our provision to continue to maintain national economic recovery and maintain the health of the State Budget and our economy,” said Sri Mulyani.
Bank Indonesia (BI) reported that Indonesia’s Foreign Debt (ULN) at the end of the fourth quarter of 2020 was recorded at 417.5 billion US dollars, or around Rp 5,803.2 trillion (exchange rate of Rp 13,900 per US dollar).
The position of Indonesia’s external debt at the end of the fourth quarter of 2020 was recorded to be higher than the end of the third quarter which amounted to US $ 413.4 billion.
The amount of debt consists of public sector external debt at the end of the fourth quarter of 2020, namely the government and central bank, amounting to US $ 209.2 billion or Rp.2,907 trillion and private sector external debt including BUMN of US $ 208.3 billion or Rp.2,895 trillion.
“With these developments, Indonesia’s external debt at the end of the fourth quarter of 2020 grew by 3.5 percent (yoy), down from the growth in the previous quarter of 3.9 percent (yoy),” said Executive Director of the Head of the BI Communication Department, Erwin Haryono in press release quoted from Kompas.com.
Erwin said that the slowdown in foreign debt growth was mainly due to the slowdown in private external debt growth. This is because the government’s external debt has increased compared to the previous quarter.
In the fourth quarter of 2020, Government external debt was recorded at US $ 206.4 billion or grew by 3.3 percent (yoy), higher than the growth in the third quarter of 2020 of 1.6 percent (yoy).
Erwin said this development was supported by maintained investor confidence, which encouraged the inflow of foreign capital in the Government Securities (SBN) market.
On the other hand, there has been a partial withdrawal of foreign loan commitments to support the handling of the Covid-19 pandemic and the National Economic Recovery (PEN) program.
“Government external debt is still managed carefully, credibly and accountably to support priority spending,” said Erwin.
More specifically, external debt includes the health services sector and social activities (23.9 percent of total government external debt), the construction sector (16.7 percent), the education services sector (16.7 percent), the government administration sector, defense and social security. mandatory (11.9 percent), as well as the financial services and insurance sector (11.1 percent).
Meanwhile, private external debt grew at a slower pace compared to the previous quarter, recorded at 3.8 percent (yoy), lower than the previous quarter at 6.2 percent (yoy).
“This development was driven by the slowdown in the external debt growth of non-financial institution companies (PBLK) as well as a deeper contraction in the external debt growth of financial institutions (LK),” said Erwin.
At the end of the fourth quarter of 2020, PBLK external debt grew by 6.4 percent (yoy), slowing down from the previous quarter’s growth of 8.4 percent (yoy).
In addition, the contraction of LK external debt was recorded at 4.7 percent (yoy), larger than the contraction in the previous quarter which was recorded at 0.9 percent (yoy).
“By sector, the largest external debt with a share of 77.1 percent of total private external debt came from the financial services and insurance sectors, the electricity, gas, steam / hot and cold air (LGA) procurement sector, the manufacturing sector, and the mining sector. excavation, “said Erwin.
As a whole, his party stated that the structure of Indonesia’s external debt remained healthy, supported by the application of the principle of prudence in its management.
This healthy external debt structure is reflected in the ratio of Indonesia’s external debt to Gross Domestic Product (GDP) at the end of the fourth quarter of 2020 which was maintained at around 39.4 percent, although it increased compared to the ratio in the previous quarter of 38.1 percent.
“The healthy structure of Indonesia’s external debt is reflected in the large share of long-term external debt, which reaches 89.1 percent of the total external debt,” he said.
In order to maintain a healthy external debt structure, Bank Indonesia and the Government will continue to strengthen coordination in monitoring the development of external debt, supported by the application of prudent principles in its management.
“The role of external debt will also continue to be optimized in supporting development financing and encouraging national economic recovery, by minimizing risks that may affect economic stability,” concluded Erwin.