The head of the House of Representatives\u2019 Budget Committee (Banggar\nDPR) RI, Said Abdullah, believes the government still has sufficient\nfiscal room to operate within a budget deficit of below 3% of GDP.<\/p>\n
This statement responds to Finance Minister Purbaya Yudhi Sadewa\u2019s\nopening of options to expand the State Revenue and Expenditure Budget\n(APBN) deficit for the 2026 fiscal year above 3% of GDP.<\/p>\n
\u201cTo achieve fiscal discipline, there are certainly many ways,\u201d said\nSaid in a statement in Jakarta on Friday.<\/p>\n
He cited various approaches including maintaining achievement of\nstate revenue targets, improving taxation through a coretax system\nexpected to enhance tax collection, and increasing export commodity\nprices such as crude oil and coal, which would boost Non-Tax State\nRevenue (PNBP).<\/p>\n
On the expenditure side, he said, the government could implement\nefficiency measures by focusing on various non-priority programmes, an\narea where the government has experience.<\/p>\n
According to him, if expenditure levels can be controlled and\nbalanced with revenue realisation, the target deficit below 3% can be\nmaintained.<\/p>\n
Additionally, Said noted that the government must also maintain\nfinancing targets to manage them properly. Amid negative credit rating\npressures, he continued, it is not easy to obtain financing through\nState Securities (SBN).<\/p>\n
\u201cThe Finance Minister and his entire team must be able to convince\nforeign buyers to resume accepting SBN and expand SBN in the retail\nportion,\u201d he said.<\/p>\n
He stated that at the Budget Committee, there has been no initial\ndiscussion presented by the government regarding expanding the deficit\nbeyond 3% of GDP or implementing quantitative easing policies.<\/p>\n
If the government pursues a deficit policy exceeding 3% of GDP, Said\nnoted there are both advantages and disadvantages. The advantage in the\nshort term is wider fiscal space, but in the medium term it will shift\ncurrent fiscal burdens to the future as deficit expansion is financed\nthrough debt.<\/p>\n
He explained that similarly with quantitative easing policy, if using\nthe Bank Indonesia (BI) model of absorbing SBN from the secondary\nmarket, then BI\u2019s capacity must be considered, as the central bank has\nresponsibility for controlling exchange rates and inflation.<\/p>\n
He stated that these two responsibilities are not easy and require\ncaution, as well as a strong mix of tools from BI.<\/p>\n
\u201cIt must be calculated carefully, so that when BI absorbs SBN in the\nsecondary market, it does not collapse in exchange rate and inflation\ncontrol which is its primary duty. The risks must be calculated very\ncarefully,\u201d Said stated.<\/p>\n
Likewise, he continued, with money printing, the risk of stagflation\nmust be analysed clearly and cannot be done carelessly, as current\nconditions show the people\u2019s purchasing power is not yet strong, so if\nmore money circulates, stagflation could occur simultaneously.<\/p>\n
The head of the Budget Committee also expected studies involving\neconomists so that each economic policy receives adequate technocratic\nsupport, so that all risks can be mapped including their mitigation.<\/p>\n
\u201cWhat I want to emphasise is that our fiscal be healthy, stable and\nsustainable,\u201d he said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/government-still-has-sufficient-fiscal-space-budget-committee-chief-reveals-this-1773410276", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }