Indonesia 2015 budget deficit may reach 2.78% of GDP: finance ministry official

[JAKARTA] Indonesia's fiscal deficit in 2015 may reach 2.78 per cent of gross domestic product (GDP), a finance ministry official said on Friday, bigger than what the minister saw in November as a worst case scenario.

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

"We wouldn't touch the 3 per cent cap because it is for central and regional governments (combined budget deficit). We've received information that regional governments are posting surpluses, so we're still safe," Scenaider Siahaan, the ministry's director of borrowing strategy told Reuters.

In November, Finance Minister Bambang Brodjonegoro said the worst case scenario was for a deficit of 2.70 per cent this year, versus 1.9 per cent in the original plan for 2015.

REUTERS