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Govt expects wider deficit, plans to issue more debt
The government has altered its forecast for debt issuance in 2021 to cover a wider-than-expected budget deficit as tax collection is projected to fall short of the full-year target.
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Finance Minister Sri Mulyani updates reporters on state budget planning during a press conference at the Finance Ministry on Aug. 18. (Finance Ministry/Public relation team)
T
he government plans to issue more debt than it had forecast last month as the revenue shortfall in the state budget is expected to widen at the end of the year.
Finance Minister Sri Mulyani Indrawati told lawmakers on Monday that debt issuance for the full year of 2021 was now forecast to reach Rp 1.02 quadrillion, up from the Rp 958.1 trillion forecast on July 20.
The minister did not specify the reasons for the upward revision but emphasized that the figure was still below the Rp1.17 quadrillion stated in the 2021 budget plan, with Rp 150.4 trillion taken from unused annual state budget funds.
“During difficult times, we strive to manage the state budget and debt issuance with prudence. We will use leftovers to reduce our debt issuance this year,” Sri Mulyani said during a meeting at the House of Representatives.
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The government now expects a budget deficit of Rp 961.5 trillion, equivalent to 5.82 percent of GDP, up from Rp 939.6 trillion, or 5.7 percent of GDP, projected on July 20.
Despite the higher deficit-to-GDP ratio, Sri Mulyani said the numerical figure was lower than stated in the state budget plan at Rp 1 quadrillion, or 5.7 percent of GDP.
