The Indonesian Government Officially Widened the 2020 State Budget Deficit to 6.34% of GDP

As an effort to deal with the economic impact of the Covid-19 pandemic, the Government issued Presidential Regulation (Perpres) Number 72 of 2020 replacing Presidential Regulation Number 54 of 2020. Through the Presidential Regulation, the Government officially widened the 2020 State Budget deficit to 6.34% of GDP or nominally, equivalent to Rp 1,039.2 trillion. This is due to an increase in the budget for handling the impact of Covid-19 in the country, which reached Rp 695.2 trillion. The government continues to make efforts to carry out economic stimulus, even though there are consequences such as an increase in deficits and debt burden. However, these efforts are needed to maintain the sustainability of the Indonesian economy, especially during this pandemic.

The Federal Reserve is preparing for the possibility of an economically debilitating second wave of coronavirus infections even as it’s hoping that can be avoided. In launching the Main Street and corporate lending facilities this month and starting to buy corporate bonds, the central bank has laid the groundwork for stepped-up support for the economy and financial markets should they be undermined by fresh outbreaks of the virus. (Bloomberg)

Source: Danareksa Sekuritas Debt Research

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