Indonesia Books Budget Deficit of 0.7% of GDP for January to May

MACROECONOMICS - JAKARTA, June 5 - Indonesia booked a budget deficit of 180.4 trillion rupiah ($10 billion) in the first five months of this year, equivalent to 0.7% of gross domestic product, Finance Ministry data showed on Friday.

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Total revenue over the January to May period reached 1,185 trillion rupiah ($65.74 billion), up 19.1% year-on-year, while total expenditure was up 34.4% to 1,365.4 trillion rupiah. In the same period last year, the budget deficit stood at 0.09% of GDP.

Indonesia's deficit could be kept low due to improvements in tax and customs revenues, Finance Minister Purbaya Yudhi Sadewa said at a presentation of the data, adding that tax revenues were up 22.1% year-on-year.

"Improvements in the economy are really happening," Purbaya said. "The finance minister isn't lying, the government isn't lying."

Spending for goods was up 115% compared to the year before, dominated by expenditure for President Prabowo Subianto's flagship free meals programme.

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As of May, 88 trillion rupiah has been spent on the programme, having reached 63 million recipients, ministry data showed. Indonesia allocated 268 trillion rupiah this year for the project, targeting about 83 million people.

Subsidies for fuel, power and fertilisers jumped 208% year-on-year as of May 31, data showed.

"There's a wrong impression that our fiscal policy has been managed terribly ... all policies by the president have been calculated accurately and in detail," Purbaya said.