JAKARTA (TheInsiderStories) – Indonesia’s state budget deficit swelled to Rp 368 trillion (US$26.28 billion) or 2.29 percent of the gross domestic product (GDP) in November 2019, higher than the same period year earlier of Rp279,7 trillion or 1.8 percent of GDP, the finance ministry has announced today (12/19). At the end of the year, the government is targeting a budget deficit of Rp296 trillion or 2.26 percent of GDP.

“Indeed, there will be a widening of the deficit from the initial target of 1.84 percent of GDP. There is also an increase in the deficit compared to last year,” Finance Minister Sri Mulyani Indrawati said in a press conference at her office.

The deficit was driven by revenue growth which was lower than the pace of growth in state spending. She said, there was pressure on state revenue from the weakening of the global economy, according to Indrawati. The minister, however, stated that as of December 13, 2019, the deficit had dropped from 2.29 percent. She optimistic at the end of 2019, the deficit will still be at 2.21-2.2 percent of GDP.

State revenue was recorded at Rp1,677,2.1 trillion or 77.5 percent of the 2019 state budget target of Rp2,165.1 trillion. The figure only grew 0.9 percent compared to the end of the November 2018 period amounting to Rp1,662.9 trillion.

While the realization of state expenditure was recorded at Rp2,046 trillion or 83.1 percent of the 2019 state budget ceiling in the amount of Rp2,461.1 trillion. The realization grew by 5.3 percent compared to the same period last year amounting to Rp1,942.6 trillion.

“However, when viewed in the midst of global economic pressure, we can still survive, namely by continuing to grow in revenue,” Indrawati noted.

Furthermore, the primary balance until the end of November has recorded a deficit of Rp101.3 trillion, up from the realization of the same period last year which experienced a deficit of Rp28.6 trillion.

In November, the budget financing realization was recorded at Rp 421 trillion or reached 142.2 percent of the target 2019 state budget which was Rp296 trillion. This funding is 21 percent higher than the same period last year amounting to Rp347.9 trillion.

According to Indrawati, there is the potential for a reduction in the state budget deficit until the end of the year, because in the first two weeks in December there was an improvement in revenue compared to previous months. She said the deficit is expected to be 2.1 percent until the end of 2019.

“So the budget deficit will decrease from 2.29 percent, possibly to 2.1 percent, so it will not approach 3 percent but close to 2 percent,” she concluded.

US$1=Rp14,000

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