JAKARTA (Reuters) -Indonesia booked a 321.6 trillion rupiah ($19.38 billion) budget deficit in the January to August period, equivalent to 1.35% of gross domestic product, finance ministry data showed on Monday.
Total revenues in the period reached 1,639 trillion rupiah, down 7.8% from the same period in 2024, while total spending stood at 1,960 trillion rupiah, up 1.5% from a year earlier.
“We need to speed up government spending (until the year-end) so we could reach the spending target,” said new finance minister Purbaya Yudhi Sadewa.
Higher government spending until the end of the year is needed to further boost economic growth, Purbaya said previously, with the target this year set at 5.2%.
Southeast Asia’s largest economy has maintained a steady growth rate of around 5% in the past few years, with the second quarter increase of 5.12% the highest since 2023.
However, economists said the outlook for the rest of the year and beyond is clouded by weakening global trade and softening domestic consumption.
The government has launched an economic stimulus package worth nearly $1 billion to bolster growth in the fourth quarter, including rice handouts, tax breaks and temporary jobs in infrastructure projects.
Purbaya, who took over the job just two weeks ago, has also moved more than $12 billion of state money from the central bank to commercial banks, hoping to spur credit growth, including for the government’s cooperative programme.
Indonesia’s government was also considering offering a market-based incentive to encourage the public to put any U.S. dollars they hold into the domestic financial market rather than send them abroad, with the aim of bolstering dollar financing for projects.
Indonesia’s central bank last week delivered another surprise interest rate cut with an eye on boosting economic growth further, even as concerns grow among investors about the country’s fiscal discipline.
The rupiah is one of emerging Asia’s worst performing currencies so far this year. It has dropped around 3% against the U.S. dollar, hit by concerns about Indonesia’s domestic finances and the independence of the central bank.
($1 = 16,598 rupiah)
(Reporting by Stefanno Sulaiman; Writing by Stanley Widianto; Editing by David Stanway)
Comments