Wednesday, 19 June 2019 | 07:53 WIB

Sri Mulyani: Budget Deficit to Touch 1.86 Percent by End of 2018

Indonesia Finance Minister Sri Mulyani (blogtalenta)

JAKARTA, NNC - Indonesia Finance Minister Sri Mulyani Indrawati has confirmed that the budget deficit at the end of the year would be around 1.86 to 1.87 percent of gross domestic product (GDP). This figure is lower than the 2018 State Budget target of 2.19 of GDP.

"The deficit is currently still at 1.95 percent. The deficit is estimated to touch 1.86 percent-1.87 percent by the end of the year," Sri Mulyani said on Thursday (06/12).

The Finance Minister stressed that the realization of the budget deficit was supported by strong revenues from the taxation sector, and the effective and efficient performance of government spending during 2018.

"Our overall deficit will be smaller, because our revenues are quite strong, and monthly expenditure is smaller than the State Budget estimate. This illustrates stronger revenue growth than spending," Sri Mulyani said.

She continued that the improvement in the increasingly smaller budget deficit has also contributed to the primary balance, which at the end of the year is expected to reach negative IDR15 trillion or close to zero.

Until the end of November 2018, the realization of the budget deficit was recorded at IDR287.9 ​​trillion, or 1.95 percent of GDP.

The realization came from state revenues of IDR1,654.5 trillion, or 87.3 percent of the target, and state expenditure of IDR1,942.4 trillion, or 87.5 percent of the budget cap.

The budget deficit is also the lowest since 2014, which means that the management of the state budget is getting better and optimal.

Previously, the budget deficit in 2014 was recorded at 2.19 percent of GDP, 2.78 percent in 2015, 2.53 percent in 2016, and 2.59 percent in 2017.

So far, the government continues to maintain a budget deficit below three percent of GDP in accordance with the mandate of MInistry of Finance Law Number 17 Year 2003.