You are here

Indonesia budget deficit could hit legal limit in worst-case scenario: fin min

Cranes are seen over the skyline of the Indonesian capital Jakarta on Nov 5, 2015.

[JAKARTA] Indonesia's current account deficit this year could reach 2.7 per cent of gross domestic product in the worst-case scenario, Finance Minister Bambang Brodjonegoro said on Friday, which is the maximum level permissible for the deficit under law.

Indonesia's state treasury law stipulates the country's budget deficit should be capped at a maximum 3 per cent of GDP, but the central government may only record a deficit of 2.7 per cent, as the deficits run up by regional governments are assumed to be equivalent to 0.3 per cent.

President Joko Widodo could be at risk of impeachment if the budget law is broken.

A finance ministry official earlier this month expected the government to run a fiscal deficit equivalent to 2.59 per cent of GDP.