During a teleconference with the press on Tuesday from the Bogor Presidential Palace in Bogor, West Java, Jokowi said he had signed a Government Regulation in lieu of law (Perppu) on state financial policy and financial system stability.
The regulation has been issued in anticipation of a higher deficit in the 2020 state budget as a result of the increase in budgetary spending, he explained.
The President said the state budget deficit is now expected to widen to 5.07 percent of the gross domestic product (GDP).
"Because what we are facing now is a high-pressure situation, I have signed a Perppu on state financial policy and financial system stability," Jokowi said.
The regulation, he continued, would serve as a legal basis for the government, and banking and financial services authorities for imposing measures to ensure public health, secure the national economy, and stabilize the financial system.
Of the total budget allocation for COVID-19 handling, around Rp75 trillion would be used for the health sector, Rp110 trillion for social protection, Rp75.1 trillion for taxation incentives and micro loans stimulus, and Rp150 trillion for the national economic recovery program.
The national economic recovery program would include restructuring of debt and provision of business funding assurance, especially for micro, small, and medium-scale enterprises.
Jokowi has sought the Parliament’s support for the issuance of the government regulation.
The House had earlier urged the government to issue a Perppu to raise the deficit cap in the 2020 state budget plan from the current 3 percent of GDP to 5 percent.
A higher cap would allow the government to step up development of healthcare systems, disburse more social funds, and stimulate the economy in wake of the pandemic. (INE)
EDITED BY INE
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