REPUBLIKA.CO.ID, JAKARTA -- Development Bank of Singapore (DBS) said Indonesian still has room to widen its budget deficit by using more loan to finance its economic development especially infrastructure development.
"There is room for Indonesia to boost its economic growth with more loan," economist of DBS Group Research Gundy Cahyadi said at a discussion on "Analysis India vs Indonesia since Taper Tantrums 2013", here on Wednesday.
Gundy said Indonesia, which has a debt to GDP ratio of 25 percent, still fares much better than other countries with similar debt rating.
"The debts of the Indonesian government is only 25 percent of the country's GDP and it is relatively low. We believe the country still has room for widening the budget deficit this year to sustain GDP growth," he said.
He said the economic slowdown in the first four months of the year will have impact on investment sentiment.
Meanwhile, Indonesia needs large funds to finance its programs such as infrastructure development, he added.
Therefore, the government of Indonesia could increase its foreign debt ratio in order to finance development of productive sectors.
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