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Govt expects less new debt this year with higher tax collection
The Finance Ministry estimates the amount of debt issuance this year will fall to Rp 958.1 trillion, which is 18.6 percent less than the initial target, while tax revenue collection could reach Rp 1.17 quadrillion this year, leaving a shortfall of just Rp 53.3 trillion from the initial target.
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Finance Minister Sri Mulyani (left) and State-Owned Enterprises Minister Erick Thohir deliver a press statement at the Presidential Office in Jakarta on June 24, 2020. (Antara/Sigid Kurniawan/POOL)
T
he Finance Ministry expects to rack up less debt in 2021 by using leftover funds from last year and by betting on higher tax revenue this year all in minimizing fiscal pressures on pandemic-struck Indonesia.
Finance Minister Sri Mulyani Indrawati said debt issuance was projected to only reach 81.4 percent of the expected Rp 1.17 quadrillion (US$80.9 billion) for this year as the government uses accumulated cash surplus (SAL) from 2020 and higher tax collection in the first half of 2021 to cover the difference.
As a comparison, debt issuance reached 100.5 percent of the expected Rp 1.22 quadrillion last year as the government pledged billions of dollars on COVID-19 relief programs.
“This [lower debt issuance] is mainly because the nominal budget deficit will be lower. The state revenue [projection] is good and we are going to optimize the remaining 2020 budget,” Sri Mulyani told lawmakers in a meeting with the House of Representatives on Monday.
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Sri Mulyani said this year’s budget deficit, as a nominal value, would lighten to Rp 939.6 trillion, 6.64 percent lower than expected.
However, as a ratio of gross domestic product (GDP), the budget deficit would be at 5.7 percent, higher than the 2 to 3 percent in the years before the pandemic, but lower than the 6.09 percent booked last year.
