Indonesia records USD2bn budget surplus in Jan 22

  • Indonesia booked USD2bn budget surplus in Jan 22 as tax revenues soared amid a stronger economic recovery from the pandemic and high commodity prices, its finance minister said.
  • Sri Mulyani Indrawati said the surplus underscored Indonesia’s sound fiscal position and reaffirmed other economic indicators showing the recovery in Southeast Asia’s largest economy has continued in 2022, after GDP growth accelerated to 5% in 4Q21.
  • She expected GDP growth of within 4.8% to 5.5% in 2022, versus 3.7% in 2021. The strong budget performance also meant the government was on track to reduce pandemic-era fiscal stimulus and reinstate a fiscal deficit ceiling of 3% of GDP from 2023, the minister said.
  • Overall revenues rose 54.9% y/y in Jan 22 to IDR156tr, with tax collection up 65.6%, she said, adding the government also received additional income from a tax amnesty running in 1H22.
  • The government spent IDR127.2tr in Jan 22, down 13% u/u, bringing the budget to a surplus of IDR28.9tr or 0.16% of GDP, Sri Mulyani said. That compared with a deficit of IDR45.5tr in Jan 21.
  • The government repaid more bonds than it issued in Jan 22, resulting in a net negative issuance of IDR15.9tr, Sri Mulyani said, adding that it could cut 2022’s bond issuance plans further by using carry-over cash from 2021.
  • The ministry has received parliamentary approval to sell IDR991.3tr of bonds in 2022, not including refinancing and buybacks, assuming a budget deficit of 4.85% of GDP throughout 2022.
  • Sri Mulyani previously said the 2022 deficit could shrink closer to 4%. She did not offer a new forecast on 22 Feb 22.

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