Nasional

State Budget Posture Plan 2021 Must Anticipate Risk of Uncertainty Due to Global Pandemic

Detiktoday.com – The global economic situation is still developing very dynamically. The Covid-19 pandemic which hit at least 215 countries in the world increasingly creates uncertainty about the world economy.

However, in the latest projections from global institutions obtained by the President, Indonesia is projected to be included in the group of countries with the fastest economic recovery after China. However, in his direction at a limited meeting discussing the draft 2020 State Budget posture, President Joko Widodo asked his staff to remain vigilant and be able to anticipate every possibility.

“We must remain vigilant of our various possibilities and anticipations of the risk of a second wave and the continuing uncertainty of the global economy in 2021,” the President said through a video conference from the Bogor Presidential Palace, West Java, on Tuesday, 28 July 2020.

In a report received by the President, the OECD predicts that in 2021 the global economy will begin to recover with a growth rate of 2.8 to 5.2 percent. The IMF even predicts economic growth in the coming year will reach 5.4 percent.

“I think that if this estimate is correct we will be in an economic position that should also be above world economic growth,” the President said.

Therefore, in order to be able to design the 2021 state budget posture to be able to face the challenges and uncertainties of the global economy while at the same time recovering the national economy amid a pandemic, the Head of State emphasized a number of things. The first is to carry out careful calculations of macroeconomic indicators.

“It must be calculated carefully, cautiously, optimistically, but it must also be realistic taking into account the latest conditions and projections,” the President said.

The priority of using the budget and widening the upcoming 2021 state budget deficit must also focus on financing efforts to accelerate economic recovery and transformation in various sectors. Such reforms in the fields of health, food, energy, education, and the acceleration of digital transformation.

Furthermore, the President said that the contribution of the State Budget to Indonesia’s gross domestic product was only around 14.5 percent. Thus, in the midst of the current pandemic situation, the government needs to encourage government spending to leverage the economy of the community which is expected to have implications for the recovery of the private sector and MSMEs.

“In a crisis situation like this, government spending becomes the main instrument for leverage, but also so that the private sector and MSMEs can recover. This economic engine must be leveraged from our targeted and targeted APBN,” the President said.

Ending his direction, President Joko Widodo also reminded his staff not to forget the big strategic agendas of the Indonesian people, especially to avoid the trap of middle-income countries.

“Since July 1 2020 we all know that Indonesia has achieved the title of upper middle income country. However, we know the challenge to get out of the middle income trap is still large and long,” the President said.

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