Government to Maintain Deficit Below 3 Percent of GDP
Indonesian Finance Minister Sri Mulyani Indrawati — ANTARA photo.
Government to Maintain Deficit Below 3 Percent of GDP
Jakarta, 11 Shawwal 1438/6 July 2017 (MINA) – Finance Minister Sri Mulyani assured here on Wednesday that the government would maintain the deficit in the draft revised budget of 2017 below three percent of Gross Domestic Product (GDP).
“We will maintain it below 3 percent, or in line with the draft revised 2017 budget, which will be around 2.67 percent,” Antara News quoted her as saying.
Sri Mulyani stated that the projection that deficit would be higher than the assumption in the 2017 budget, which is at 2.41 percent, was made after calculating that realization of spending at ministries and state institutions will reach up to 95 percent.
“Expenditures in ministries and state institutions have been changed, with spending on goods being reduced and those on capital increased,” she noted.
The draft revised 2017 budget has also taken into account energy subsidy expansion due to increasing oil prices at international markets in the first semester this year.
State-owned oil company PT Pertamina still bears the burden of energy subsidy expansion due to an increasing assumption of Indonesia Crude Price in the 2017 budget.
“Following the decision of the minister of state enterprises and the minister of energy and mineral resources, the change or difference between the amount of subsidy in the budget and the subsidy that Pertamina has to bear will be first paid by Pertamina,” she remarked.
Potential shortfall of tax revenues
On a separate occasion, Sri Mulyani revealed that the expansion of the budget deficit was done by considering the potential shortfall of tax revenues by up to Rp50 trillion and additional spending of Rp10 trillion.
Due to the expansion of budget deficit, there will be additional spending to cover fiscal deficit of up to Rp37 trillion to Rp40 trillion.
Regarding the draft revised budget of 2017, Sri Mulyani assured that several macro assumptions set in the 2017 budget would undergo changes, including on economic growth, rupiah exchange rate against the US dollar, and the ICP.
Several additional costs that would be included in the draft revised budget of 2017 include the cost for organizing Asian Games 2017, land certification, and preparations for regional elections. (T/RS5/RS1)
Mi’raj Islamic News Agency (MINA)
