JAKARTA: The state budget deficit widened in November amid declining revenue and a year-end spending push.
During the monthly press conference on the state budget last Thursday, the Finance Ministry said state revenue as of November reached 2.3 quadrillion rupiah (US$137.6bil), or 82.1% of the full-year outlook.
The figure marked a 5.67% decline from the same period last year, with total tax revenue down 2.18% year-on-year (y-o-y) to 1.9 quadrillion rupiah and non tax revenue plunging 14.8% y-o-y.
Total state spending reached 2.9 quadrillion rupiah, or 82.5% of the budget ceiling.
The budget deficit stood at 560.3 trillion rupiah, or 2.35% of gross domestic product (GDP), wider than the 2.02% recorded in October, though Finance Minister Purbaya Yudhi Sadewa said the deficit “remains within manageable limits and in line with the state budget design”.
The figure remains below the full-year projection of 2.78% of GDP, a midyear upward revision from the original 2.53% outlined in the 2025 state budget plan.
The International Monetary Fund (IMF) forecast a deficit of 2.8% of GDP for Indonesia this year, which is in line with the government’s projection.
However, the IMF expects the figure to rise to 2.9% next year, whereas the government plans to reduce the budget deficit to 2.68%.
Last Monday, Purbaya said the ministry could not guarantee that the revenue shortfall would remain within the 2.78% as stipulated in this year’s budget outlook.
“We’ll control it so it is below 3% so that we don’t violate the (legal cap),” he said at the time. “The strategy is to control governance, which is what we have pursued.
“Maybe it will be a bit bigger (than 2.78% of GDP) but it will still be below 3%, so legally it remains safe.”
Speaking at last Tuesday’s monthly briefing, Deputy Finance Minister Suahasil Nazara noted that most tax items recorded annual declines in November.
Corporate income tax dropped the steepest at 9% y-o-y, followed by personal income tax at 7.8%, and then value-added tax (VAT) and luxury tax, both of which fell 6.6%.
Meanwhile, the “other taxes” category posted 21.5% y-o-y growth last month, slowing significantly from 42.3% in October.
This category includes temporary deposits, which are later classified as income tax or VAT after taxpayers file their annual tax returns.
“This is a feature available in our Coretax (integrated online) system, allowing taxpayers to pay in advance, with payments officially categorised after they submit their tax returns,” Suahasil said.
Total state spending rose slightly at 0.59% as of November, driven mainly by an annual increase in central government spending, while regional transfers were maintained at 795 trillion rupiah.
Suahasil said the increased budget realisation had partly contributed to fiscal stimulus aimed at sustaining consumption and purchasing power, as reflected in social spending, which grew 19.2% on the continued rollout of economic stimulus measures.
In October, the government added 30 trillion rupiah in stimulus spending with the rollout of this year’s fourth stimulus package, which focused on direct cash transfers and an expanded internship programme.
The fourth-quarter stimulus currently totals 46.2 trillion rupiah, comprising 30 trillion rupiah in new spending and 16.2 trillion rupiah in unspent funds from ongoing schemes. — The Jakarta Post/ANN
