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What Are the Risks of a Widening State Budget Deficit?

The option to widen the budget deficit has emerged after Indonesian Coordinating Minister for the Economy Airlangga Hartarto revealed a deficit scenario stemming from the conflict in the Middle East. Awalil Rizky, a senior economist from Bright Institute, stated that this plan carries the risk of increasing debt financing and lowering the assessment level by international rating agencies. The State Budget's Financial Note has presented fiscal risk factors with various assumptions, ranging from low-scale or unlikely to occur (score 2) to significant impact or high likelihood (score 5) [...]