Jokowi govt plans to cut budget deficit to 1% of GDP by 2019

Jakarta

INDONESIA's new government plans to cut its budget deficit to one per cent of gross domestic product (GDP) by 2019, partly by reforming the tax system, the finance minister said on Thursday. A shortfall in tax revenue estimated at US$6.15 billion threatened to push the 2014 budget deficit in South-east Asia's largest economy to breach a legally binding limit of 3 per cent of GDP.

The new government of President Joko Widodo wants to curb the budget deficit, which forces Indonesia to issue bonds to pay interest on outstanding loans. "The way to achieve this is through reform in tax administration," Finance Minister Bambang Brodjonegoro told a news conference. Mr Brodjonegoro had earlier vowed to keep this year's budget deficit at 2.4 per cent of GDP.