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2021 budget deficit, debt issuance outperform targets
These pave the way for the government to reinstate a budget deficit cap of 3 percent of GDP starting 2023.
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Finance Minister Sri Mulyani Indrawati delivers a speech during the 2021 Indonesia Fintech Summit in Bali in December 2021. (Courtesy of Kemenkeu/Firman)
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ndonesia’s full-year budget deficit and debt issuance closed well below targets in 2021, paving the way for an upcoming fiscal consolidation as the economy rides out the COVID-19 pandemic.
Finance Minister Sri Mulyani Indrawati said on Monday that the 2021 budget deficit was at Rp 783.7 trillion (US$54.92 billion) or 4.65 percent of gross domestic product (GDP). The figure is “far below” the planned Rp 1 quadrillion or 5.7 percent of GDP.
Debt issuance closed at Rp 867.4 trillion or 86.3 percent of the 2021 target. The debt is 30 percent lower than in 2020 when issuance jumped to fund COVID-19 relief programs.
These bring the government closer to reinstating a budget deficit cap of 3 percent of the GDP by 2023 as required by prevailing regulations.
“Fiscal consolidation has been solid,” said Sri Mulyani.
Read also: Lower budget deficit to help Indonesia face global risks in 2022
The lower deficit was made possible due to significant increases in state revenue last year, when collection increased 21.6 percent annually to Rp 2 quadrillion. The figure exceeded the Rp 1.7 quadrillion target set in the 2021 state budget.
