Indonesia Can Keep Budget Deficit Under 3% Ceiling, World Bank Says

MACROECONOMICS - JAKARTA. Indonesia's budget deficit is forecast to increase this year and may widen further as President-elect Prabowo Subianto implements his policy agenda, but revenue-side reforms could keep the gap under the legislated ceiling, the World Bank said on Monday.

The deficit is forecast to widen to 2.5% of GDP this year from 1.7% in 2023 as cost-of-living measures and falling commodity prices hit the budget bottom line, the multinational lender said in its Indonesia Economic Prospects report.