Ministry of Finance of Republic of Indonesia : Low Deficit, Indonesia’s Economic Growth is one of the Highest

Jakarta, 30/12/2016 MoF - Indonesia's deficit and financing management is prudent and productive. With low deficit of financing and debt ratio toward Gross Domestic Product, Indonesia's economy becomes one of the highest.

'With an average deficit of 2 percent, we can create an average growth of 5.5 percent. Meanwhile, if we look at India, whose economy is rated as good, it has an average deficit of 7.5 percent and 6.7 percent of growth,' said Minister of Finance Sri Mulyani Indrawati in a public lecture at the University of Muhammadiyah Malang (UMM) on Wednesday (28/12).

Furthermore, the minister said, there are still many major countries in the world for the last five years, whose budget deficit is greater than the economic growth. 'Like Brazil, its average deficit is 4.9 percent, but the economic growth is only 1 percent,' she said.

In fact, the condition of developed countries like the United States, Britain and Japan, is also not much different compared to Brazil. Japan, for example, the average budget deficit in the last five years is 7.7 percent, with an average economic growth of only 0.6 percent.

On the occasion, the Minister also stressed that well managed deficit and financing will generate great benefits for the country. Financing, one of which is loan/ debt does have risks. However, if it manages properly, the loans will provide much greater benefit to the advancement of a country.

'So it should not be viewed partially as debt, but see the context to be able seeing both the risks and benefits. Debt for consumption is not good, yet if it for developing (infrastructure) electricity or roads, or clean water, it will create greater prosperity than the cost of debt,' she explained. (nv)