Thoughts on the Economic Situation.
As promised couple weeks ago, I finally get my hands on my first-ever data analysis graphs and findings.
Without getting much into the economics side of it — though data and economics are massively intertwined — I think what I have on the table is quite basic things most people would understand and have a little bit background to it.
I was inspired to construct a dashboard because the one-year commitment that I signed with the University as being a student assistant, and I was tasked to make one that displayed the overall condition of the University for the years ending 2019 and 2020. What I did this time, is that I took various metrics commonly used to assess an economic state of a country. Of course, GDP is one; government budgets are the other measure, since it (mainly) shows how our taxes are being used to fund public services.
A general pattern that I see across the years is that though GDP increased significantly with some contractions due to high IDR:USD exchange rate, government revenues are short relative to its expenses. The gap between the two is often called surplus-for positive balance, and deficit-for negative balance.
Though the deficit is minuscule in terms of GDP (about 1.8% on average), it still serves as a reminder that there is room for more revenue collection: be it from taxes (individual and corporate), and state-owned enterprises’ (SOEs’) share of profits. Or, a more radical approach would be cutting government expenses, which is highly dangerous — GDP may be reduced if doing so, further reducing the growth rate.
Some efforts had been made for maximizing this collection through tax amnesty programs and taxes for purchases on internet services like Shopee, Spotify, Netflix etc.; though there are some forces wanting more taxation toward the top earners, that is still yet to happen.
Projections for the end of the year, personally speaking, might look bleak, as the capital Jakarta is currently on social restrictions-as well as the uncertainty carried by COVID-19. This exogenous factor definitely adds burden to the ever-increasing expenditure and the inability for firms to meet their profits (less tax payments and/or deferring taxes) might put 2020 as the year with another deficit.
