Province and Local Finances in Indonesia during COVID-19 Pandemic

9 April 2021

Author: Riatu Mariatul Qibthiyyah


In the year 2020, in response to COVID-19 health crisis, there were series of adjustment adopted by provinces and local governments. From their stated revised budget, most of provinces and local governments responded by shifting spending allocation to COVID-19 related activities mitigation, rather than by expanding expenditures. Lower-level government average expenditures growth in 2020 is -10.11% and -12.11% respectively for provinces and local governments. Expenditure contraction occurred in all provinces and only 12.4% of local governments show of a positive growth in its public expenditures. On the type of expenditures adjustment, a high increase of emergency spending which covered of 3.3% of total provinces and local government expenditures, may also translate to higher health expenditures. Based on aggregate provincial level data and given that COVID-19 fatalities were concentrated in Java-Bali region, the preliminary results show that emergency spending seem effective in reducing COVID-19 fatalities for the case of provinces in Java-Bali region.

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