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Jakarta Post

Central bank praises govt efforts to address budget deficit

  • Ayomi Amindoni
    Ayomi Amindoni

    The Jakarta Post

Jakarta   /   Tue, September 20, 2016   /  09:51 am
Central bank praises govt efforts to address budget deficit Finance Minister Sri Mulyani Indrawati (second right) in a meeting with members of House of Representatives Commission XI on Aug. 31 in Senayan, Jakarta. The meeting was held to discuss budget cuts and progress on the tax amnesty. (Antara/Sigid Kurniawan)

The central bank has lauded the government's efforts to prevent an excessive widening of the state budget deficit.

Bank Indonesia Governor Agus Martowardojo commented on the government's latest statement that the deficit could amount to 2.5 - 2.7 percent of the gross domestic product (GDP) this year, slightly wider than the previous estimation at 2.5 percent of GDP.

He admitted that the central bank had yet conduct a thorough study related to the budget deficit but praised the government for its way of handling the situation.

"The government's commitment to keep the budget deficit at no more than 2.5 percent is good, and I also welcome that the government is not only optimizing tax revenues, but that, based on my discussions with ministries and institutions, there have also been budget cuts on non-prioritized programs," Agus explained.

Previously, Finance Minister Sri Mulyani Indrawati said there was a possibility of the state budget deficit widening by 0.2 percent due to risks of accelerated government spending and lower non-tax revenues.

In the revised 2016 state budget, the government and the House of Representatives agreed to set the budget deficit at 2.35 percent of GDP. However, due to an expected shortfall in tax revenues, the Finance Ministry now projects a state budget deficit at 2.5 percent of GDP. (bbn)

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