KONTAN.CO.ID - JAKARTA. Indonesia will expand its COVID-19 recovery budget this year from earlier targets to 619 trillion rupiah ($44.20 billion) to provide better support for the health sector as well as to help businesses, Finance Minister Sri Mulyani Indrawati said.

The latest increase comes after the government had previously lifted the budget to 553.09 trillion rupiah in late January, up from an initial 372.3 trillion rupiah.

"This is just to show that fiscal support for the economic recovery and the handling of COVID-19 is still the most important priority," Sri Mulyani told a virtual economic forum, describing the amount as comparable to last year's support.

In 2020, Indonesia allocated 692.5 trillion rupiah for the programme, including funds to upgrade hospitals and provide medical equipment to fight the pandemic, but spent only about 579.78 trillion rupiah by the end of the year.

Indonesia is tackling the worst coronavirus outbreak in Southeast Asia, with its case load accelerating in recent months and reaching nearly 1.1 million infections as of Tuesday.

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Sri Mulyani said the 2021 COVID-19 recovery budget will include funds for mass vaccination, social assistance, and for small and medium businesses support, as well as for tax incentives.

Indonesia's tax office said on Wednesday that tax incentives for businesses will be offered until June 30 this year, extended from a previous deadline of Dec. 31, as part of the efforts to limit the economic impact from the pandemic.

The finance minister pledged that the government, which has targeted a fiscal deficit amounting to 5.7% of GDP this year, will maintain "prudent and sustainable" management of government debt to finance the spending.

"In principle, the government will make sure its debt is managed so it does not exceed 60% of GDP," she said. The Finance Ministry's debt office has estimated debt will be 41% of GDP this year.

Editor: Yudho Winarto