Indonesia’s budget deficit forecast to reach 2.2-2.5 pct of GDP

Indonesia's state budget deficit is expected to reach 2.2-2.5 percent of the country’s gross domestic product (GDP) this year as the new coronavirus-caused acute respiratory disease (COVID-19) has hindered global economic activities, Finance Minister Sri Mulyani Indrawati said.

11, Mar. 2020

Indonesian Finance Minister Sri Mulyani Indrawati. (ANTARA)
Indonesian Finance Minister Sri Mulyani Indrawati. (ANTARA)

JAKARTA,VNA - Indonesia's state budget deficit is expected to reach 2.2-2.5 percent of the country’s gross domestic product (GDP) this year as the new coronavirus-caused acute respiratory disease (COVID-19) has hindered global economic activities, Finance Minister Sri Mulyani Indrawati said.

The COVID-19 outbreak has suppressed the projection of revenue in the state budget due to the disruption in supply and demand in the global supply chain, Indrawati said at a press conference on March 9.

The sluggish demand has undermined the prices of commodities, including Indonesia's export commodities.

This has implicated the state revenue, for instance, from the oil and gas sector. The revenue from taxes in some sectors was also affected by the change in the business performance due to COVID-19.

The minister said, amidst the stagnating revenue, the Indonesian government has tried to optimize expenditure to increase fiscal contribution to the economy, as it would need stimulus from fiscal instruments to minimize the impact of global economic pressures.

The Finance Ministry has worked closely with the Coordinating Ministry for Economic Affairs to prepare a fiscal policy to anticipate global uncertainty in the first quarter of 2020, she added. - VNA