"In mid term the deficit would be narrowed but the budget will remain productive to stimulate the economy," the minister told the lawmakers at a plenary session of the House of Representative here on on Wednesday.
Sri Mulyani was present at the plenary session to read out the government response to general views of factions concerning macro economy and fiscal policy principles in an initial discussion of 2019 draft state budget.
She said the country`s debt ratio is also expected to narrow and primary balance is directed toward a positive condition in 2020 to provide a strong foundation for the government of the following term to prepare development strategy.
She said the government will always prudently keep the debt ratio at a manageable level in line with the law and to maintain debt composition within an efficient and safe limit.
"The government also gives priority to funding productive sector mainly infrastructure and improvement of the quality of human resources," she said.
She said the government fiscal policy in 2019 will still tend to be expansive but more measured and well directed with budget deficit at around 1.6 percent-1.9 percent of the GDP.
"The deficit is set so that the budget will continue to have a driving power for the economy to protect the more vulnerable and poorest people, to narrow the gap, by keeping the ability to create fiscal room to protect the economy from potential global turbulence," she said.
In order to cover the budget deficit, the government will be more prudent in financing management, she added.
The minister repeated saying that prudence, productivity in utilization, efficiency in cost of borrowing are foremost in debt management while maintaining macro economic balance.
"Debt financing will be properly and prudently planned by taking into account loan ceiling and repayment capacity," she said. *
Reporter: Satyagraha
Editor: Yosep Hariyadi
Copyright © ANTARA 2018
