Indonesia braces for wider deficit and swelling debt in 2025 budget plan

[JAKARTA] Indonesia is set to face a larger budget deficit and a higher debt next year due to high interest rates and a weakened currency, said Finance Minister Sri Mulyani Indrawati.

Sri Mulyani, who is widely expected not to join President-elect Prabowo Subianto’s administration, has proposed expanding the deficit to between 2.45 and 2.82 per cent of GDP – still below the 3 per cent ceiling – to help the new government finance its campaign programmes.

Additionally, the debt-to-GDP ratio is projected to increase to a range of 39.8 to 40.1 per cent, compared to this year’s target of just under 38.3 per cent.