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INDONESIAN Finance Minister, Sri Mulyani Indrawati said that emerging market sovereign debt levels had risen in the past two years, in line with the widening budget deficit due to the pandemic.
“We see an increase in debt from emerging markets from 2020-2021 compared to pre-COVID levels. In this case, Indonesia rose 10.8%,” Sri Mulyani said at a meeting with the House of Representatives Finance Commission, Thursday (1/27).
From the explanation presented by Sri Mulyani, there were a number of countries with lower debt increases than Indonesia (RI), for example Russia which only rose 4.1%, Saudi Arabia rose 2%, Vietnam rose 4.3%, Mexico rose 6.5%, and Brazil rose 2. ,9%.
On the other hand, a number of countries whose debt jumped higher than Indonesia, for example Thailand rose 17%, the Philippines rose 22%, South Africa rose 12%, China rose 11.8%, Malaysia rose 13.6%, and India rose 16 ,5%.
“This is a way of whether the policy design and assurance that we are doing is relatively working well and effectively enough to attack COVID-19 and its excesses in the economy,” said Sri Mulyani.
Sri Mulyani said that the budget deficit in various countries had indeed experienced a spike due to the counter-cyclical policies that had to be taken to restore the economy during this pandemic.
It can be seen that the increase in the country’s state budget deficit reached 10.8% in the 2020-2021 period. He said the figure was bigger than Mexico and Vietnam, which only rose 8.6% and 6.7%, respectively.
“But compared to other emerging countries as well, Malaysia, Thailand, the Philippines, Saudi Arabia, China, South Africa, Brazil and India, their deficits have soared in two years to well over 10 percent,” he said.
In detail, Malaysia 11%, Thailand 11.6%, Philippines 13.4%, Saudi Arabia 14.4%, South Africa 19%, Brazil 19.5%, and India jumped 24%.
In terms of Gross Domestic Product, Sri Mulyani said that the Real GDP index of the Indonesian economy had exceeded the pre-COVID-19 level, which was at 101.1. He mentioned that only a few countries had reached the pre-COVID-19 level, namely Indonesia, Brazil, Russia, Vietnam, and China.
Meanwhile India, South Africa, Saudi Arabia, Myanmar, Mexico, Thailand and the Philippines are still below pre-pandemic levels.
“We can imagine that fiscal consolidation from countries with extraordinary countercyclical conditions will be much more difficult. Especially if the economy has not recovered to pre-COVID levels. This will certainly make it more difficult for them to consolidate fiscally,” said Minister Sri Mulyani. [antaranews/photo special]
