Budget Deficit Potentially Widen, Government Prepares to Use SAL

TRIBUNBATAM.id - The government anticipates the possibility of widening the 2019 State Budget (APBN) deficit by preparing various financing instruments.

In the latest projection, the budget deficit rose to 1.93% of gross domestic product (GDP), higher than the previous projection of 1.84% of GDP. 

In order to prepare the financing instrument, the Minister of Finance, Sri Mulyani, issued Regulation of the Minister of Finance (PMK) Number 144/2019 concerning Estimating Deficit and Additional Financing of the State Budget (APBN) for the 2019 Budget Year.

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The regulation, which was signed on October 17, 2019, provides an opportunity for the government to use the excess budget balance or called (Saldo Anggaran Lebih (SAL)).  

The government also formed the Asset Liability Management (ALM) Committee at the Ministry of Finance. This committee will calculate the amount of the deficit and the amount of funds needed to patch the budget shortfall.

The team will also determine the instruments used.

Just a note, the government can also use loans, or issue state securities (Surat Berharga Negara). 

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If for example the government decides to use SAL funds, the regulation also regulates the procedure for withdrawing the SAL funds.

The Director General of Treasury of the Ministry of Finance will transfer SAL funds from SAL cash accounts, to the state general cash account in rupiah. 

In his notes, the use of SAL for financing in the 2019 period in accordance with Law (Law) Number 12 of 2018 concerning the 2019 APBN is Rp 15 trillion.

With the use of SAL, the SAL position maintained by the Ministry of Finance is still within safe limits as a buffer or for funding needs at the beginning of the year. 

The 2019 budget deficit will widen from the initial projection of only 1.84% of gross domestic product (GDP) to 1.93% of GDP. However, it is also possible that the budget deficit ratio can be even greater. 

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Nevertheless, the Minister is optimistic that widening the budget deficit will not interfere with the credibility of the state budget.

The finance ministers in these three government periods considered that the increase in the natural deficit was in the midst of the use of the state budget as an instrument of encouraging and boosting economic activity. 

The government will also communicate with all economic and financial market players so that they understand the dynamics of the country's financial policy.

Especially in terms of the state budget and the risk of adding deficits. (*) 

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