Jakarta. Finance Minister Sri Mulyani Indrawati outlined the government's commitment to careful fiscal management at the BNI Investor Daily Summit 2024, emphasizing the need for selective state spending to ensure public funds are used responsibly while accommodating various interests.

“I am a good listener, and I always consider all budget requests. This allows us to have discussions, and whenever there is fiscal space, I will affirm programs that can be effectively implemented. This is a cautious aspect of the state treasurer's role. I don’t want to be labeled as ‘Mrs. No,’” Sri Mulyani said in Jakarta on Tuesday.

As the state treasurer, Sri Mulyani takes a selective approach to ensure that government spending aligns with development programs, fostering economic growth and providing social protection for the public.

“If I say ‘no,’ it implies that development is halted, but that’s not the case. It’s about selectivity and quality, reflecting our responsibility in using public funds,” explained Sri Mulyani.

The APBN serves a countercyclical function; when the economy is under pressure, government spending is ramped up to alleviate that stress. For instance, during the Covid-19 pandemic, the government increased spending to meet urgent needs for those affected by the crisis.

“During Covid, we made breakthroughs due to the extraordinary situation, employing various unusual fiscal instruments. One of these was unprecedented fiscal expansion, alongside burden sharing with Bank Indonesia,” said Sri Mulyani.

She noted that Indonesia has been able to consolidate its fiscal position quickly. The budget deficit decreased from 6.14 percent of GDP in 2020 to 4.57 percent in 2021.

This positive trend continued in 2022 and 2023, with the budget deficit gradually declining to 2.35 percent and 1.61 percent of GDP, respectively.

“Indonesia is among the few countries in the world that managed to achieve fiscal consolidation post-pandemic within just two years. Many often overlook the lasting effects of the initial shock, which have profound implications,” Sri Mulyani concluded.

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