Indonesia posts US$8.7 billion Q1 budget surplus, stronger rupiah seen cutting deficit outlook

Indonesia posted a US$8.69 billion budget surplus in the first quarter on strong tax collection and the recent strengthening of the rupiah currency could help further reduce this year’s deficit, officials said on Monday (Apr 17).

Indonesia’s tax take rose dramatically in 2022 amid high global commodity prices and this year’s revenues have remained strong, based on March data, amid improvement in the domestic economy after pandemic restrictions were lifted late last year.

Revenues in January to March stood at 647.2 trillion rupiah (S$54 billion), up 29 per cent from the same period last year, while spending rose 5.7 per cent to 518.7 trillion rupiah, according to finance ministry data.

The first quarter’s surplus was equivalent to 0.61 per cent of gross domestic product (GDP) and compared with a 0.06 per cent surplus in 2022‘s first three months.

The recent appreciation of the rupiah against the US dollar would bode well for government revenues, including increasing revenues from royalties on natural resources and reducing interest payments on debt and spending on fuel subsidies, Febrio Kacaribu, the head of the ministry’s fiscal policy agency, told a news conference.

“The budget deficit will be more under control,” Febrio said.

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The rupiah has strengthened more than 5 per cent so far this year, better than other emerging Asian currencies, even as it fell 0.6 per cent on Monday’s trading.

Febrio did not offer a new forecast for the 2023 budget deficit. The government targets a deficit of 2.84 per cent of GDP this year.

South-east Asia’s largest economy likely grew 5 per cent in the first quarter and the government maintained a GDP growth target of 5.3 per cent, Febrio added.

Indonesia’s statistics bureau is due to release first-quarter GDP data early next month.

Last year, the economy grew 5.31 per cent. REUTERS