Indonesia’s budget tips into deficit in October, on track for full year target
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INDONESIA’S state budget tipped into a 0.7 trillion rupiah (S$60.3 million) deficit for the January-October period, having shown a 67.7 trillion rupiah surplus in the first nine months. It was also on course to meet its full-year deficit target, Finance Minister Sri Mulyani Indrawati said on Friday (Nov 24).
While the budget deficit for the first 10 months was equivalent to just 0.003 per cent of gross domestic product (GDP), the government expects the 2023 deficit to be below 2.3 per cent of GDP, compared with 2.35 per cent in 2022.
Total revenues for the 10 months were 2,240.1 trillion rupiah (S$192.3 billion), up 2.8 per cent on an annual basis. Total spending was 2,240.8 trillion rupiah, down 4.7 per cent, Sri Mulyani told a press conference.
“So far, our state-budget performance is still on track; if there’s a deviation, it will be a positive one. This is a momentum that we will continue to maintain,” she said.
The government typically spends significantly more in the fourth quarter because authorities wait until auditors check bills for subsidies and projects.
The ministry maintained its outlook that the budget deficit for 2023 would be below 2.3 per cent of GDP due to higher-than-expected revenues.
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State revenues for the 10 months were already at 90.9 per cent of the full-year target, while spending in the same period was 73.2 per cent of the total allocation in 2023, the minister’s presentation showed.
Sri Mulyani said in October that spending would rise significantly in the rest of the year to pay upcoming bills, including the government’s fiscal incentives to maintain people’s purchasing power.
Government spending for the rest of the year and the start of election season will help the country to reach its economic growth goal this year of around 5 per cent, the ministry has said.
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Indonesia will hold presidential and legislative elections on Feb 14. The campaign season starts next week.
Election-related spending is expected to contribute about 0.2 percentage points to GDP growth in 2023, and about 0.25 percentage points in 2024, Febrio Kacaribu, the head of fiscal policy agency at the finance ministry, told the news conference. REUTERS
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