On September 29, the Indonesian Parliament approved President Joko Widodo’s US$185 billion budget for 2021. The President has proposed a 2,747.5 trillion-rupiah (US$185 billion) budget for 2021, with measures designed to focus on accelerating economic recovery amid the COVID-19 pandemic.
Total spending for 2021 was agreed at 2,750 trillion rupiah ($185.25 billion), 0.4% bigger than the 2020 budget, but the deficit forecast for 2021 was smaller at 5.7% of gross domestic product, compared with 6.34% this year.
Indonesia’s economy is set to shrink for the first time since the 1998 Asian financial crisis because of the pandemic this year, within a range of -1.7 per cent to -0.6 per cent. The 2021 budget assumes economic growth will rebound to 5 per cent, said Finance Minister Sri Milani Indravati.
“The 2021 budget is supportive and consolidative. Supportive meaning it will continue to support economic recovery … and consolidative meaning the deficit is smaller,” she said in a virtual news conference after the budget was passed.