Indonesia Jan-Sep 20 fiscal deficit at 4.16% of GDP on higher spending

  • Indonesia’s budget deficit was estimated at IDR682.1tr in the Jan – Sep 20 period, equivalent to 4.16% of gross domestic product, Finance Minister Sri Mulyani Indrawati said.
  • The government has forecast a fiscal deficit of 6.34% of GDP for 2020, the widest in decades, due to increased spending on the COVID-19 pandemic response.
  • Total spending in the first nine months of the year was IDR1,841.1tr, up 15.5% y/y while revenue slid 13.7% y/y to IDR1,159tr, Sri Mulyani told a virtual news conference.
  • The government has faced criticism for slow budget disbursement, but Sri Mulyani said the latest data showed an acceleration that should prop up an economic recovery, noting nine-month spending was 67.2% of planned 2020 spending.
  • The central bank has so far met 58% of its targeted purchases of government bonds, on which it is forgoing interest, amounting to IDR229.68tr, she said.
  • Luky Alfirman, who heads the finance ministry’s debt management department, said the government aims to fully utilise its IDR397.56tr bond sale agreement for 2020 with Bank Indonesia and the proceeds would be used in part to finance procurement of vaccines.

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