Jakarta (VNA) - The Government and House of Representatives of Indonesia passed the 2021 state budget bill into law on October 1, aiming at accelerating economic recovery amid the COVID-19 pandemic and pushing for structural reforms to boost competitiveness.

Indonesian Finance Minister Sri Mulyani Indrawati said the 2021 State Budget Law targets Indonesia’s economic growth to rebound to 5 percent next year. This will follow an expected economic contraction of 0.6 to 1.7 percent this year.

Economic growth in 2021 will be driven by gradual recovery in domestic consumption and government spending to maintain people’s purchasing power amid the new normal, she said, adding that investment will grow next year because of the base effect and an increase in development programmes, while exports and imports will rise in line with global economic recovery.

On that basis, the State budget deficit is expected to reach 1 quadrillion Rp (61.55 billion USD), or 5.7 percent of the gross domestic product (GDP), lower than the estimated 6.34 percent of GDP this year as the government will slightly cut its spending while at the same time slightly increasing revenue from taxes.

The Government will continue with spending in priority sectors, including infrastructure, tourism development, food resiliency and information and communication technology (ICT), among others. It is also planning to spend 373.2 trillion Rp on debt interest payment next year, or more than 10 percent of the government’s budget./.