Risks of Removing Budget Deficit Cap
The government’s plan to remove the deficit cap on the State Budget could reduce investor confidence in the financial markets, sending the debt burden soaring.
Ghoida Rahmah
July 8, 2024
THE risks outweigh the benefits. That is the danger of removing the fiscal deficit limit in the State Budget. According to Teguh Dartanto, the government’s plan to exceed the 3 percent deficit limit without urgent reasons—such as during the Covid-19 pandemic—could have fatal consequences for national fiscal policy.
“When there is no deficit control like during the New Order era, our debt burden, especially foreign de
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