Fin Min: Budget deficit slightly wider to 2.6%, economic growth over 5.1%

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JAKARTA (TheInsiderStories) – Finance Minister Sri Mulyani Indrawati sees deficit of Indonesian Revise State Budget for 2017 slightly wider to 2.6 percent from the targeted 2.41 percent of the gross domestic product (GDP).

While the economic growth, She said, could be better than 5.1 percent due to changes in macro assumptions and falling Indonesian Crude Oil Prices (ICP). She continued beside economic growth, several macro assumptions will change including the exchange rate and ICP in the revision of the 2017’s state budget.

“There are some spending posts that we have to accommodate such as the Asian Games, land bank  for infrastructure projects and changes in macro assumptions. We will keep the deficit below 3 percent and for this year we expect the deficit to be slightly wider than 2.41 percent to 2.6 percent due to the change in assumptions,” She said in the meeting with the press last night.

She added, with the widening budget deficit there will be extra costs up to Rp40 trillion and the total amount will increase from Rp330 trillion to Rp370 trillion. The widening budget deficit has a potential shortfall in tax receipts by up to Rp50 trillion and an extra spending of Rp10 trillion.

To finance the deficit, Directorate General of Financing and Risk Management Ministry of Finance Robert Pakpahan explained, the office will releases more local government bonds. The ministry also plans to issue Eurobond in the second half more than US$1 billion for deficit financing purposes.

(Written by Brigida Ernestina Elu Wea, Email: Flo@theinsiderstories.com)