Indonesia: Sri Mulyani Predicts 2018 State Budget Deficit at 1.87 Percent

TEMPO.CONusa Dua – Finance Minister Sri Mulyani Indrawati ensures the state budget deficit at the end of 2018 will be around 1.86-1.87 percent of the gross domestic product (GDP). The prediction is lower than the target set in the 2018 State Budget (APBN) which was 2.19 percent.

“Now the deficit is still at 1.95 percent. Until year’s end, it is estimated to be 1.86-1.87 percent,” said Sri on Thursday, December 6, during a media meeting in Nusa Dua, Bali.

Sri Mulyani asserts the realization of state deficit is supported by a strong absorption from the tax sector and the effective and efficient of the government’s work throughout the year.

“Our state deficit in a whole will be lower because we have strong absorption and the monthly expenditure is lower than the estimation of APBN. This shows stronger growth of the revenue than the expenditure,” Sri explains.

According to the minister, such improve in state deficit budget, which is gradually lower, helps to support the primary balance that in the year’s end will be recorded at minus Rp15 trillion or nearly zero.

Per November 2018, the state budget deficit is recorded at Rp287.9 trillion or 1.95 percent of GDP. The realization is accounted from state revenue that worth Rp1,654.5 trillion or 87.3 percent of the target and state expenditure of Rp1,942.trillion or 87.5 percent of the budget ceiling.

The state budget deficit is at the lowest figure since 2014, and so that shows better and optimal management of APBN.

Earlier in 2014, the state budget deficit recorded at 2.19 percent to GDP, 2.78 percent in 2015, 2.53 percent in 2016, and 2.59 percent in 2017.

The government continuously strives to maintain the state budget deficit below three percent to GDP as mandated under the Law on State Finance No. 17 of 2003.