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Jakarta Post

Govt to reduce spending after revenue growth slows in first half

  • News Desk

    The Jakarta Post

Jakarta   /   Tue, July 23, 2019   /   01:33 pm
Govt to reduce spending after revenue growth slows in first half Finance Minister Sri Mulyani Indrawati (right), standing alongside Deputy Finance Minister Mardiasmo, interacts with a legislator after a presentation on the fiscal policy principles of the 2020 state budget. (Antara/Puspa Perwitasari)

Finance Minister Sri Mulyani Indrawati has said the government will reduce spending in the coming months as revenue growth was slow in the first half of 2019.

“We will continue to improve efficiency, both [for projects] that will head to the auction floor and [projects] that are being implemented,” Sri Mulyani said in Jakarta on Monday as quoted by

The House of Representatives’ working committee for 2019 state budget deliberation projected central government spending in the second half to reach Rp 896.6 trillion (US$64.19 billion) or 54.9 percent of the total budget.

With the second-half spending projection, full-year spending is projected to reach 93.4 percent of the total budget or Rp 1.53 quadrillion. Last year, central government spending finished at 100.1 percent.

According to the working committee, subsidies are projected to total Rp 212.4 trillion this year, lower than what was allocated in the state budget at Rp 224.32 trillion.

“The spending projection is based on a change in basic macroeconomic assumptions, the realization of the fuel subsidy, subsidized LPG in 3-kilogram canisters, the fertilizer subsidy and the energy underpayment policy,” said working committee member Iskandar Syaichu.

Sri Mulyani said lower spending in the second half was by no means an issue, as spending in the first half was higher due to payments related to the Asian Games and the mitigation of natural disasters.

“If we can spend about 94 to 95 percent of the total allocated budget, it can be considered an improvement,” she said.

Previously, the Directorate General of Taxation reported that tax revenues grew 3.75 percent to 603.34 trillion (US$43.29 billion) in the first half of 2019, much lower than the 9.5 percent target set in the 2019 state budget. Meanwhile, the growth in the first half of 2018 was recorded at 14.3 percent. (bbn)