MACROECONOMICS - Finance Minister Sri Mulyani has said the government will continue to reduce its dependency on foreign debt, which is still needed to cover the deficit in the state budget because spending projection is still higher than state revenue.
“But, we cannot just stop obtaining debt suddenly,” Sri Mulyani said during a press conference in her office in Jakarta on Monday as reported by kompas.com
She explained the spending projection in the draft 2018 state budget was to reach Rp 2.20 quadrillion (US$ 165.09 billion), while state revenue was projected to reach Rp 1.88 quadrillion.
It means the deficit in the 2018 state budget will reach Rp 325.90 trillion or 2.19 % from the gross domestic product (GDP), said Sri Mulyani.
The deficit projection in the 2018 state budget, however, was less than the projection in 2017, which reached Rp 397 trillion or 2.92% of GDP.
The minister said in 2018, the government planned to find debt of Rp 399 trillion, Rp 62.1 trillion lower than this year’s additional debt projection.
According to data from the Finance Ministry, government debt in June reached Rp 3.71 quadrillion, compared to Rp 3.67 quadrillion in May 2017.
The ministry, however, said the debt figure, which was 28% of GDP, was still far from the 60% debt to GDP ratio that was allowed by prevailing regulation.
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