Indonesia's Public Wealth: A Balance Sheet Approach to Fiscal Policy Analysis

Abstract

Public sector balance sheets (PSBS) provide a framework for comprehensive and deepanalysis of fiscal risks and policies. To illustrate these benefits, this paper shows how PSBSanalysis can be applied to assess risks to Indonesia's public sector stemming from its publiccorporations. The paper also shows that the government's plans to finance a ramp-up inpublic investment with additional tax revenue increases both economic growth and publicwealth.

Keywords: Financial soundness indicators, Economic growth, Interest rate increases, Real interest rates, Public financial corporations, Public Sector Balance Sheet, Intertemporal Fiscal Balances, Public Investment, Indonesia., intertemporal, tax-financed, public corporation, percent of GDP, non-financial

JEL Classification: H00, H55, H60, H63, H68, H75, H81, E01, G21, H83