JAKARTA (TheInsiderStories) – Indonesia’s state budget deficit swelled to Rp104.7 trillion (US$12.93 billion) or 1.4 percent of the gross domestic product (GDP) in July, higher than the previous month of Rp135.8 trillion or 0.84 percent of GDP, the finance ministry has announced today (08/26).

Finance Minister Sri Mulyani Indrawati said the widening of the deficit was due to skyrocketing state spending. Meanwhile, state revenues were unable to balance the pace of spending due to global economic turmoil, such as economic uncertainty to commodity price fluctuations on the international market.

“The realization of the deficit is not as low as planned because state revenues are weaker and state spending is very strong. The realization of all revenue posts shows that our economy is under pressure from the global economic turmoil as exports fall and commodity prices fluctuate down,” the minister said in Monday’s press conference at her office.

In terms of revenue, the country’s financial pockets have been filled as much as Rp1,052.8 trillion or 48.6 percent of the revenue target of Rp2,165.1 trillion by the end of the year. State revenue posts grew 5.9 percent this month or lower than July 2018 which reached 16.5 percent.

While state revenues reached Rp1,052 trillion and grants of Rp800 billion. State revenue was contributed by taxation bags of Rp810.7 trillion or 45.4 percent of the target Rp1,786.4 trillion. The post which has been the main pillar of the country’s revenue only grew 6.1 percent last month. In fact, in July 2018 it was able to grow to around 16.2 percent.

Then, the non-tax state revenue of Rp241.3 trillion or has filled 63.8 percent of the target Rp378.3 trillion. Receipt of this post grew 14.2 percent, but again lower than the same period last year reaching 22.7 percent.

On the other hand, the realization of spending has reached Rp1,236.5 trillion or 50.2 percent of the target Rp2,461.1 trillion. State expenditure grew 7.9 percent or higher than the same period last year which was only 7.7 percent.

“This year, the strong one is spending to the regions, while the ministry or agency expenditure is still growing, but lower than last year,” Indrawati said.

In detail, the expenditure of ministries or institutions is Rp419.9 trillion or 49.1 percent of the target of Rp855.4 trillion. The expenditure item grew 11.7 percent or lower than last year’s 14.3 percent. Then, non-ministerial expenditure reached Rp341.6 trillion or 43.9 percent of the target of Rp778.9 trillion. This realization grew 6.4 percent or fell sharply from last year which reached 16.4 percent.

While transfer spending to regions and village funds reached Rp475.1 trillion or 57.7 percent of the target Rp826.8 trillion. This post grew 5.9 percent from the previous minus 2.3 percent. Contributions came from transfers to the regions reaching Rp433.2 trillion or 57.2 percent of the target Rp756.8 trillion with growth reaching 4.9 percent. While the realization of village funds has reached Rp41.9 trillion or 59.8 percent of the target Rp70 trillion with growth reaching 16.8 percent.

Furthermore, the primary balance is in the minus position of Rp25.1 trillion or widening from the target of Rp20.1 trillion. Then the budget difference is Rp46 trillion.

Although the deficit widened and is approaching the deficit target this year 1.84 percent of GDP, Indrawati ensures that the ministry will continue to maintain the realization of the deficit to remain healthy. This will be done with the management of state money that is increasingly credible and accurate.

US$1=Rp14.200

Written by Lexy Nantu, Email: lexy@theinsiderstories.com