ADB expects to lend Indonesia up to $10.7 billion through to 2023

JAKARTA, Sept 23 (Reuters) - The Asian Development Bank on Wednesday said it would lend Indonesia about $10.7 billion between 2020 to 2023 for government programmes including coronavirus pandemic relief.

The Manila-based multilateral lender pledged to help Indonesia improve its economic competitiveness while addressing risks such as greater economic uncertainty due to the novel coronavirus and climate change.

“The strategy provides a flexible and agile framework for ADB to help Indonesia incorporate green recovery and other sustainable development options, while strengthening domestic resource mobilization to support the recovery efforts,” ADB President Masatsugu Asakawa said in a statement.

The ADB approved a $1.5 billion loan this year to help Indonesia plug a ballooning fiscal deficit due to its response to the coronavirus outbreak.

Indonesia, which is bracing this year for its first recession since the 1998 Asian financial crisis, expects a fiscal deficit equal to 6.34% of gross domestic product (GDP) in 2020, the widest in more than a decade, while next year’s deficit is seen at 5.7% of GDP.

The country normally has a 3% of GDP ceiling for the annual budget deficit, but this was waived for three years to accommodate more spending to weather the impact of the pandemic.

The loans for Southeast Asia’s largest economy would also be used to support human capital development, financial inclusion and clean energy development.

Finance Minister Sri Mulyani welcomed the ADB’s support, according to the ADB statement. (Reporting by Tabita Diela Editing by Gayatri Suroyo and Robert Birsel)