Why Does the Regional Administration Expenditure Underwhelm?

Summary

President Joko Widodo recently mentioned that up to Rp 170 trillion regional budgets were still in banks. The number was a total accumulation of local funds across Indonesia. Such a condition contradicted the government’s efforts to boost economic growth through government spending. “Rp 170 trillion of funds are still in banks. It means that we shall spend it quickly, especially in the third quarter,” Jokowi stated while monitoring the COVID-19 mitigation in West Java on Tuesday (8/11).

Jokowi asked regional heads to immediately realize the local expenditures so that Indonesia’s economy will grow positively in the third quarter and avoid recession. “Once we spend it as soon as possible, our economy may grow back positively,” Jokowi explained.

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