VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

A screenshot. The Fiscal Policy Agency (BKF) head Febrio Kacaribu during a webinar to safeguard Indonesia's economy amid the COVID-19 pandemic in Jakarta on Monday. (20/7/2020). ANTARA/Dewa Wiguna

The Indonesian government, through the Fiscal Policy Agency (BKF) of the Ministry of Finance, is preparing the National Economic Recovery (PEN) Program for 2021 since the impact of the COVID-19 pandemic is projected to continue.

"The 2020 national economic recovery program must be continued in 2021," BKF Head Febrio Kacaribu stated during a webinar to safeguard Indonesia's economic survival amid the COVID-19 pandemic held in Jakarta on Monday.

Kacaribu noted that allocation for the 2021 PEN Program encompasses a focus on social protection, MSMEs, as well as sectoral ministries and institutions and local governments.

The BKF head expounded that the cost for social protection is estimated to not fall too far from the budget allotment for the 2020 PEN that reaches Rp203.9 trillion.

Kacaribu explained that the large allocation for social protection was based on his estimation that unemployment and poverty would still be rife in 2021.

"We will also support MSMEs and regional governments, especially the labor-intensive ones," he noted.

With the continuation of the PEN program, allocation to offset the 2021 state budget deficit is estimated to still be above three percent.

In the macroeconomic policy principles for the preparation of the 2021 state budget drafting, the government proposed a budget deficit of up to 4.17 percent of the gross domestic product (GDP).

However, Kacaribu estimates that budget deficit in the 2021 state budget draft is wider than the earlier proposed 4.5-4.7 percent of the GDP after consultation with the House of Representatives and several parties.

As is known, the handling costs, including the 2020 PEN, reached Rp.695.20 trillion, resulting in a 2020 National Budget deficit of 6.34 percent. (ANTARA)