State expenditure to leverage crisis-hit economy: Jokowi

State expenditure to leverage crisis-hit economy: Jokowi

President Joko Widodo during a discussion with journalists at the Merdeka Palace in Jakarta, recently. ANTARA/HO-Ministry of State Secretary Public Relations/pri/sh

Jakarta (ANTARA) - State expenditure has become an instrument to leverage the country's economy in the recovery path amid the current crisis arising from the COVID-19 pandemic, according to President Joko Widodo (Jokowi).

At a virtual limited meeting on state budget planning 2021 at the Bogor Presidential Palace, Bogor, West Java, on Tuesday, the president pointed to the state budget having merely contributed some 14.5 percent to the gross domestic product (GDP).

"In such a crisis, the government expenditure has become an instrument to leverage (the economy)," he remarked.

The private sector and micro-, small-, and medium-scale enterprises (MSME) could recover by providing stimulus. "This economic wheel must be leveraged using our on-target state budget," he remarked.

The head of state also highlighted the importance of implementing the country's strategic and main agenda despite the crisis being faced on account of the COVID-19 pandemic.

"This is particularly with the attempt to escape the middle-income trap. Since July 1, Indonesia has become an upper-middle income country. However, we still need to go a long way to escape the middle-income trap," the head of state affirmed.

On July 1, the World Bank classified Indonesia as an upper-middle income country, an upgrade from its earlier status of lower-middle income.

The classifications are based on the gross national income (GNI) per capita. Indonesia witnessed its GNI per capita rise to US$4,050 in 2019, exceeding the income threshold for upper-middle income, from $3,840 in 2018.

Upper-middle income status categorizes countries, with a GNI per capita of $4,046 to $12,535, while the lower-middle income economies are those, with a GNI per capita of between $1,036 and $4,045.

Low-income countries are nations having a GNI per capita of less than $1,036, while those with a GNI per capita of $12,535 are considered high income.

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