Still early in the year, the state budget is already in deficit of Rp 31.2 trillion.

Observing the performance of the State Budget until February 28, 2025, Minister of Finance Sri Mulyani Indrawati said that there was a deficit of IDR 31.2 trillion or 0.13 percent of Gross Domestic Product (GDP).

"There was a deficit of Rp 31.2 trillion at the end of February, or 0.13 percent of GDP. The 2025 State Budget was designed with a deficit of Rp 616.2 trillion. So, this 0.13 percent deficit is certainly within the State Budget's design target of 2.53 percent of GDP," said Finance Minister Sri Mulyani at a press conference in Jakarta on Thursday (March 13).

Finance Minister Sri explained that despite the deficit, the state budget still recorded a primary balance with a surplus of IDR 48.1 trillion.

Furthermore, the former World Bank managing director explained that state revenue realization by the end of February reached IDR 316.9 trillion, or 10.5 percent of the State Budget target. He explained that state revenue from taxes reached IDR 240.7 trillion, consisting of IDR 187.8 trillion in taxes and IDR 42.6 trillion in customs duties. Meanwhile, non-tax state revenue (PNPB) was recorded at IDR 76.4 trillion.

"The realization of state spending as of the end of February, with efficiency measures and other measures, still stands at Rp348.1 trillion, or 9.6 percent of this year's total spending target. This comprises central government spending of Rp211.5 trillion, or 7.8 percent of the target; ministry spending of Rp83.6 trillion; and non-ministerial spending of Rp127.9 trillion. Meanwhile, transfers to regions reached Rp136.6 trillion by the end of February," he explained.

Global Disruption, Trump's Policies

Finance Minister Sri also touched on the global situation, which is shrouded in uncertainty, particularly the impact of United States policies following Donald Trump's second term in office. "Since President Trump was inaugurated until now, so many policies have been... executive order "President Trump continues to cause unrest, so that this unrest is felt throughout the world," he said.

This volatility or dynamic, Sri said, was reflected in the rupiah exchange rate, which weakened to Rp16,340 per USD by the end of February. The volatility was also evident in the movement of the yield (profits from) government securities to oil prices. "The yield on government securities is similar to what happened with the disruption caused by various policies issued by President Trump 2.0. There's also the interaction and reaction of major bloc countries, whether Canada, Europe, China, or Mexico. This has created a dynamic or volatility in exchange rates and yields across all countries," he explained.

He also added that the country's economic growth is projected to stagnate at five percent in 2024. He believes this growth is still a significant achievement amidst global economic conditions that continue to face various uncertainties from all sides.

"Economic growth in 2024 is projected to reach 5.03 percent across all years. I want to emphasize that this is a challenging level for all countries to maintain at a level above five percent, given the extraordinary disruption of the global economy," he said.

CORE Indonesia economist Yusuf Hendry said the state budget deficit that occurred at the beginning of the year was influenced by at least several important factors. First, he said, it was due to a contraction in state revenues of around 20 percent. Even state revenue from taxes alone was corrected by up to 40 percent. Second, the VAT rate adjustment at the last minute of last year also affected the tax refund process. Furthermore, and no less important, Yusuf said, was the tax administration system, which was deemed unprepared.

As is known, the Directorate General of Taxation launched a system to simplify tax reporting. However, in practice, the Coretax system hasn't been working optimally.

The next factor is the economic side, one of which is commodity prices, which have plummeted compared to previous years. "That's what ultimately led to the deficit. And this deficit also arrived earlier. Last year, the deficit wasn't until May 2024, but now it's earlier in January, and this is the first January deficit since 2021. I think this should be a separate note if the government wants to evaluate the performance of the state budget going forward," said Yusuf.

Will the deficit widen? Yusuf replied that it depends on the government's stance in implementing various priority programs and efficiency measures, especially given the less-than-supportive economy. "I think we need to wait and see how wide the deficit will be. But what needs to be anticipated is the economic factors. Perhaps initially, seasonal factors, such as Ramadan and Eid, could boost revenue, but after that, what needs to be considered is that if there is no economic boost, it will also affect revenue in general, which will influence the deficit, which has the potential to widen compared to the previously determined target," he concluded.

Source: VOA

#Indonesiagold #Lebaran2025 #Korlantaspolri #oddeven #oscarliving #furnitureshoppingmadeeasy #OLIV #PToscarmitrasuksessejahteratbk #Indonesia #indonesianeconomy #recession2025 #towardsgoldenindonesia #budgetdeficit #monetarycrisis #wealthypower #layoffs2025 #APBNdeficit