Indonesia records US$2b budget surplus in January: Finance Minister

[JAKARTA] Indonesia booked a US$2 billion budget surplus in January as tax revenues soared amid a stronger economic recovery from the pandemic and high commodity prices, its finance minister said on Tuesday (Feb 22).

Sri Mulyani Indrawati said the surplus underscored Indonesia’s sound fiscal position and reaffirmed other economic indicators showing the recovery in South-east Asia’s largest economy has continued this year, after GDP growth accelerated to 5 per cent in the final quarter of 2021.

She expected GDP growth of within 4.8 per cent to 5.5 per cent range this year, versus 3.7 per cent in 2021.

The strong budget performance also meant the government was on track to reduce pandemic-era fiscal stimulus and reinstate a fiscal deficit ceiling of 3 per cent of GDP next year, the minister said.

Overall revenues rose 54.9 per cent on a yearly basis in January to 156 trillion rupiah (S$14.6 billion), with tax collection up 65.6 per cent, she said, adding the government also received additional income from a tax amnesty running from January to June.

The government spent 127.2 trillion rupiah last month, down 13 per cent from a year ago, bringing the budget to a surplus of 28.9 trillion rupiah or 0.16 per cent of GDP, Sri Mulyani said.

That compared with a deficit of 45.5 trillion rupiah in January 2021.

The government repaid more bonds than it issued in January, resulting in a net negative issuance of 15.9 trillion rupiah, Sri Mulyani said, adding that it could cut this year’s bond issuance plans further by using carry-over cash from last year.

The ministry has received parliamentary approval to sell 991.3 trillion rupiah of bonds this year, not including refinancing and buybacks, assuming a budget deficit of 4.85 per cent of GDP throughout the year.

Sri Mulyani previously said the 2022 deficit could shrink closer to 4 per cent. She did not offer a new forecast on Tuesday. REUTERS