The proportional expansive fiscal policy is to maintain fiscal sustainability, the president or Jokowi as he popularly known said when presenting the draft state budget and financial note at a plenary session of the House of Representatives here.
"It is reflected by the narrowing state budget deficit target from 2.59 percent in 2015, to 2.12 percent in 2018 and to 1.84 percent in 2019," the president said.
He said the policy in state budget, which remained under control showed that the government has always observed prudence in its fiscal management giving emphasis on improving the people`s welfare.
Improvement in the fiscal policy also is reflected by the primary balance deficit that narrowed from Rp142.5 trillion in 2015 to Rp64.8 trillion in 2018 and is expected to continue to narrow to Rp21.7 trillion in 2019.
"With the trend in the fiscal policy, we are expected to be able to achieve a condition of level in primary balance or surplus in the near future," the president said.
He pledged that the financing of the state budget in 2019 would be accountable as the budget deficit and the ratio of debts to GDP will remain under control in a safe limit in line with the Law No. 17 of 2003 on state finance.
Prudence would also be closely observed in debt management, to reduce risks and cost, he went on to say, adding the debt fund would be used for productive sectors such as for education, health, infrastructure development, social security and area development.
"In 2019, the government will continue to adopt measured expansive fiscal policy to sustain economic growth to give justice for all Indonesia people," he said.
He said the government would cut budget financing by 5.4 percent in 2019, adding that the policy is consistent with what has been done in 2018 when financing was slashed by around 14.3 percent.
In the previous years, Indonesia still recorded increase in financing on fiscal expansion for stabilization and to offset shrinking commodity prices in those periods.
"With the state budget deficit and narrowing deficit in primary balance and realistic increase in income, improvement in the spending quality and prudent financing and more productive, the state budget is expected to be healthier, fairer and reliable," the president said.
Reporting by Ade Irma Junida
Editing by Sri Haryati