The Indonesian government’s budget for 2020 came a step closer to being passed this week after the parliament’s budgetary committee approved President Joko Widodo’s spending plans for the coming year. Although spending is set to rise by 8.5% next year, the budget deficit is set to narrow slightly from an estimated 1.9% of GDP this year to 1.8% in 2020. Accordingly, fiscal policy is likely to act as a small drag on the economy. In contrast, fiscal policy across most of the rest of Asia is being loosened. Over the past couple of months a number of countries including Korea, Singapore, India and Thailand have unveiled plans to loosen fiscal policy. Stronger government spending should help to offset some of the drag from weak exports, and is one of the reasons why we think regional economic growth has now bottomed out.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services