Indonesia’s budget deficit set to widen

Bloomberg

Indonesia’s budget deficit has ballooned to more than $20 billion and is set to widen further as Southeast Asia’s largest economy struggles amid a global slowdown.
With the government on pace to miss revenue targets, the 2019 budget deficit is now expected to reach as much as 2.2% of gross domestic product, from an initial target of 1.84%. Figures showed the deficit had already climbed to 289.1 trillion rupiah ($20.5 billion), or 1.8% of GDP, as of the end of October.
“This is quite a big increase in the deficit,” Finance Minister Sri Mulyani Indrawati told reporters, warning of “significant pressure” on Indonesia’s industrial sector.
Total revenue from January through October rose 1.2% from a year earlier, to 1,508.9 trillion rupiah. That’s still only about 70% of the government’s full year-target, with income-tax revenue from the oil and gas sector sliding 9.3% year-on-year. Officials expect collection to pick up in the final two months of 2019.
The budget update comes as a global slowdown continues to weigh on Indonesia’s economy, which grew in the third quarter at its slowest pace in more than two years. The government has revised down its full-year growth forecast several times, now projecting the economy to expand 5.1%, compared to an initial estimate of 5.3%.
“We will tightly monitor the slowing global growth,” Indrawati said.