Indonesia’s 2024 finances deficit at 2.3% of GDP, smaller than anticipated

By Stefanno Sulaiman and Gayatri Suroyo

JAKARTA (Reuters) -Indonesia’s unaudited finances deficit for the 2024 fiscal 12 months was 507.8 trillion rupiah ($31.38 billion), or 2.29% of GDP, smaller than the finance ministry’s earlier estimate however greater than that of 2023, official information confirmed on Monday.

Southeast Asia’s largest economic system had beforehand estimated a finances hole of two.7% of GDP for all of 2024. In 2023, it had a deficit of 1.61% of GDP.

The deficit forecast for 2025 is 2.53% of GDP.

In her presentation of the information, Finance Minister Sri Mulyani Indrawati described the 2024 deficit as “a basis for an efficient transition of presidency”, as Indonesia inaugurated Prabowo Subianto as its new president in October.

“This was much better than what we had anticipated in the course of final 12 months,” she stated at a press convention, including that tax revenues circled to e book constructive development within the remaining quarter, after a contraction within the first 9 months of 2024.

The info confirmed there was 45.4 trillion rupiah of extra money from larger debt issuance final 12 months, which the federal government generally makes use of to scale back debt issuance plans within the following 12 months.

Sri Mulyani stated the smaller-than-expected deficit may additionally present a robust basis for the economic system in 2025, which economists have cautioned could possibly be an unsure 12 months as a consequence of altering coverage in the US below President-elect Donald Trump.

In Indonesia, monetary markets have been monitoring the federal government’s fiscal coverage after Prabowo stated he wished to be extra daring with debt to fund his flagship programmes, which embody offering free college lunches and considerably increasing farmland.

The “Free Nutritious Meals” programme, which has a finances of 71 trillion rupiah, was scheduled to start on Monday.

In 2024, whole revenues rose 2.1% from 2023 to 2,842.5 trillion rupiah. The federal government spent 3,350.3 trillion rupiah in whole final 12 months, up 7.3% from 2023.

Complete (EPA:TTEF) expenditure deliberate for 2025 is 3,621.3 trillion rupiah.

Financial development final 12 months was estimated at round 5%, Sri Mulyani stated, in contrast with 2023’s development of 5.05%.

($1 = 16,180.0000 rupiah)