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Indonesia to set deficit at pre-pandemic range in 2024
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Coordinating Political, Legal and Security Affairs Minister Mahfud MD (left), who also chairs the national anti-money laundering committee, talks with Finance Minister Sri Mulyani Indrawati as they attend a hearing with House of Representatives Commission III overseeing legal affairs in Jakarta on April 11. (Antara/Galih Pradipta)
T
he government has outlined a plan to lower the budget deficit further next year, as it continues to rein in its fiscal policy following an emergency spike in spending during the COVID-19 pandemic.
The Finance Ministry is expecting the 2024 deficit to be between 2.16 and 2.64 percent of GDP, down from this year’s target of 2.84 percent of GDP.
The 2024 figure, if achieved, would likely fall within the deficit range of 2.2 to 2.6 percent of GDP that prevailed in the five years prior to the COVID-19 pandemic, which should be possible with last year's realization at 2.38 percent of GDP.
"Considering the challenges and the change of direction taking place, we can't rely on the 'business as usual' policy anymore," Finance Minister Sri Mulyani Indrawati said before lawmakers on Friday.
Read also: Indonesia still gunning for fourth-largest economy by 2045
The meeting at the House of Representatives discussed preliminary data prepared by the ministry for the 2024 state budget draft, which will be released in August.
Sri Mulyani noted that GDP was expected grow between 5.3 and 5.7 percent. With this increase, she expected the country’s debt would represent between 38.07 and 38.97 percent of GDP next year. As of March, government debt was 39.17 percent of GDP.
