Although Covid-19 cases are still increasing, the government ensures that this year’s pandemic is still under control. Therefore, the financial sector in 2022 will not be as heavy as last year.
Minister of Finance Sri Mulyani revealed that the contraction in government spending in the third quarter of 2022 was triggered by the sloping of spending related to Covid-19.
“Last year’s government spending was very high due to Covid, there is a social safety net and budget related to Covid,” Sri Mulyani said at the Bloomberg CEO Forum, Friday (11/11/2022).
That way, Sri Mulyani believes the ministry can catch up with its spending in the last quarter.
The Central Statistics Agency (BPS) noted that government spending in the period July 2022 to September 2022 contracted by 2.88% YoY. With this achievement, government consumption contributed to the economic growth of 26.23%.
Furthermore, Sri Mulyani emphasized that her party would not delay the normalization of the fiscal deficit to the level of 3% next year.
“This has been agreed with the DPR,” she said. However, Sri Mulyani did not deny the dynamic global conditions. Therefore, he stressed that the government will always be vigilant.
This step has been defined based on well-calibrated assumptions. She understands the challenges of the global economy and emphasizes that she will always be vigilant.
The State Budget deficit above 3% of GDP means that the government is drawing more debt to meet spending. A high-risk policy amid high financial market turmoil.
“We are not blind that the challenges of the global economy will be very dynamic, so we are always prepared for events,” She said.
Like commodity prices, they can rise and fall quickly. Sri Mulyani saw this happening to Indonesian palm oil products which rose high and then fell. The same thing happens with coal.
“So we see that the volatility of this commodity must be managed well by us, but the growth momentum must be maintained,” She said. Sri Mulyani believes the government can take care of this.