Indonesia's fiscal plans on track despite virus surge, Finance Minister says

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JAKARTA : Indonesia's plans to gradually taper its pandemic-induced fiscal support will not change, even though the government has had to adjust spending plans to fight a devastating new COVID-19 wave, its finance minister told Reuters on Friday. Jakarta will still aim to gradually reduce the budget defic

JAKARTA : Indonesia's plans to gradually taper its pandemic-induced fiscal support will not change, even though the government has had to adjust spending plans to fight a devastating new COVID-19 wave, its finance minister told Reuters on Friday.

There have been calls to widen the budget deficit to provide more protection for the poor, while rating agencies have warned any loosening of the country's hard-won fiscal discipline could bode ill for its credit ratings. She also argued that the strategy is needed so that Indonesia's policy is in line with advanced countries like the United States, with the Federal Reserve already discusing tapering its bond buying programme. Early tightening by the Fed such as withdrawing stimulus and interest rate hikes could spark capital outflows from still-weak emerging economies.

Sri Mulyani said the campaign's weakness at the beginning was due to supply constraints, but Indonesia is now set to receive a large number of vaccine doses into December.

 

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