Indonesia’s budget deficit, debt issuance outperform targets
Hanoi (VNA) – Indonesia’s budget deficit and debt issuance closed well below targets in 2021, paving the way for an
upcoming fiscal consolidation as the economy rides out the COVID-19
pandemic.
Indonesian Finance Minister Sri Mulyani Indrawati said on January 3 that
the 2021 budget deficit was at 783.7 trillion rupiah (54.92 billion USD), or
4.65 percent of the gross domestic product (GDP).
Debt issuance closed at 867.4 trillion rupiah, or
86.3 percent of the 2021 target. The debt is 30 percent lower than in 2020 when
issuance jumped to fund COVID-19 relief programmes.
These bring the government closer to reinstating a
budget deficit cap of 3 percent of the GDP by 2023 as required by prevailing
regulations.
The minister attributed the increase in State
revenue to Indonesia’s economic recovery, which translated to higher income tax
revenue from employees and corporations, and higher value-added tax (VAT)
revenue from consumed and imported goods and services.
In 2022, the government will spend more on
developing the upcoming new capital city in East Kalimantan and preparing for
the 2024 general elections. It will also allocate a PEN budget for the
third year in a row, but at 414 trillion rupiah, which is 44 percent
smaller than last year.
The Finance Ministry plans to focus on executing
the second tax amnesty, which was introduced under the Harmonized Tax Law
passed last year./.