Indonesia raises economic recovery budget to $39bn

JAKARTA: Indonesia has raised its budget for the National Economic Recovery programme to 553.09 trillion rupiah ($39.4 billion), increasing fiscal support for a country struggling to contain its coronvirus outbreak, a minister said on Tuesday.

"In plenary cabinet meeting and in other meetings, we've decided the size to be 553.09 trillion rupiah. It means the government sees that economic recovery in 2021 needs a similar support than in 2020," Airlangga Hartarto, Indonesia's chief economic minister, told a business forum.

The previously approved budget for the programme in 2021 was 372.3 trillion rupiah, although authorities have said this may swell after President Joko Widodo announced he wanted to run the mass vaccination campaign for free.

In 2020, the government allocated 692.5 trillion rupiah for the programme, which included the upgrading of hospitals and provision of medical equipment and services to fight the pandemic, but spent only about 579.78 trillion rupiah.

Indonesia is set to officially surpass one million coronavirus cases on Tuesday. The country's figures for COVID-19 infections and deaths are some of the highest in Asia.

In his presentation, Airlangga unveiled plans to quadruple health spending to 104.7 trillion rupiah.

The authorities have also increased the budget for social assistance from 110.2 trillion rupiah to 150.96 trillion rupiah.

At the same forum, Febrio Kacaribu, a finance ministry official, estimated the fiscal deficit for 2021 would be 5.7% of gross domestic product, unchanged from the ministry's previous outlook.

Last year's budget deficit was estimated at 6.1% of GDP, the widest in decades as Jakarta ramped up spending to help Southeast Asia's largest economy weather the impact of the pandemic.

The economy suffered its first recession since 1998 last year. The government expects the economy to grow 5% this year, far better than a forecast contraction of 1.7% to 2.2% in 2020.