Indonesia to narrow its budget deficit by 2024

Indonesia expects to bring its budget to a narrower fiscal deficit next year, even as its economic growth is predicted to accelerate, senior officials said on Monday.

Thia comes as President Joko Widodo aims to finish he country’s remaining infrastructure projects.

Indonesia recorded a 464.3 trillion rupiah ($30.64 billion) fiscal deficit in 2022, or 2.38% of gross domestic product, based on unaudited data, the government said last month.

The country expects a fiscal deficit of 2.84 percent of GDP in 2023.

According to Finance Minister Sri Mulyani Indrawati, a 2024 state budget deficit in a range of 2.16 percent to 2.64 percent of GDP is expected.

Consumer Confidence

Addressing plans for the state budget spending for next year, Sri Mulyani said challenges for 2024 economic growth include maintaining confidence of consumers and keeping investment momentum strong, as well as anticipating export disruption over geopolitical issues.

“Next year, the budget will be maintained. On the one hand state revenues will grow with an ever-increasing tax ratio and budget spending will be maintained with discipline and in accordance to national agendas,” she said.

Separately, Indonesia’s economy in 2024 is projected to expand between 5.3 percent and 5.7 percent, Susiwijono Moegiarso, secretary of the coordinating ministry of economy, said on Monday.

Sources of that growth would be investments and household consumption, he said, which accounts for more than half of Indonesia’s GDP.

Reuters/Hauwa Abu