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State budget deficit capped at 2.82 pct of GDP for 2025

Jakarta Globe - June 4, 2024

Arnoldus Kristianus, Jakarta – The Indonesian government has decided that the state budget deficit for 2025 should not be more than 2.82 percent of the gross domestic product (GDP).

Finance Minister Sri Mulyani said Tuesday that the decision to adopt a cap that ranges from 2.45 percent to 2.82 percent of GDP had already undergone thorough calculations. Indonesia will mainly use public money to fund the new government's priority programs as Prabowo Subianto assumes the presidency in October."Financing will be maintained and managed through innovative, prudent and sustainable financing through various Indonesian debt management," Sri Mulyani said in a meeting with the House of Representatives on Tuesday.

According to Sri Mulyani, the expected state revenue for the year would be between 12.14 and 12.36 percent of the country's GDP. State expenditure would stand at around 14.59, and can reach up to 15.18 percent of the GDP. The government is aiming to keep the public debt ratio within a range of 37.9 and 38.71 percent of the GDP.

"We are also using our excess money to anticipate any uncertainties, while also providing financing for small and medium enterprises, including low-income communities ...," Sri Mulyani said.

Edy Wuryanto, a lawmaker from the Indonesian Democratic Party of Struggle (PDI-P), not long ago said the government should aim for a 0 percent budget deficit next year to avoid burdening the incoming administration. To this end, the government should ramp up its non-state tax revenue collection and improve the performances of the state-owned enterprises, among others.

"The [2025 budget] is a transitional one, so I don't think the previous government should impose a deficit burden on programs that are not part of the new government's programs," Edy said.

Source: https://jakartaglobe.id/business/state-budget-deficit-capped-at-282-pct-of-gdp-for-202