Indonesia Records $2 Billion Budget Surplus in January

INDONESIA - JAKARTA. Indonesia booked a $2 billion budget surplus in January as tax revenues soared amid a stronger economic recovery from the pandemic and high commodity prices, its finance minister said on Tuesday.

Sri Mulyani Indrawati said the surplus underscored Indonesia's sound fiscal position and reaffirmed other economic indicators showing the recovery in Southeast Asia's largest economy has continued this year, after GDP growth accelerated to 5% in the final quarter of 2021.

She expected GDP growth of within 4.8% to 5.5% range this year, versus 3.7% in 2021.

The strong budget performance also meant the government was on track to reduce pandemic-era fiscal stimulus and reinstate a fiscal deficit ceiling of 3% of GDP next year, the minister said.

Overall revenues rose 54.9% on a yearly basis in January to 156 trillion rupiah ($10.86 billion), with tax collection up 65.6%, she said, adding the government also received additional income from a tax amnesty running from January to June.

The government spent 127.2 trillion rupiah last month, down 13% from a year ago, bringing the budget to a surplus of 28.9 trillion rupiah or 0.16% of GDP, Sri Mulyani said.

That compared with a deficit of 45.5 trillion rupiah in January 2021.

The government repaid more bonds than it issued in January, resulting in a net negative issuance of 15.9 trillion rupiah, Sri Mulyani said, adding that it could cut this year's bond issuance plans further by using carry-over cash from last year.

The ministry has received parliamentary approval to sell 991.3 trillion rupiah of bonds this year, not including refinancing and buybacks, assuming a budget deficit of 4.85% of GDP throughout the year.

Sri Mulyani previously said the 2022 deficit could shrink closer to 4%. She did not offer a new forecast on Tuesday.