By Stefanno Sulaiman and Gayatri Suroyo
JAKARTA (Reuters) -Indonesia’s unaudited budget deficit for the 2024 fiscal year was 507.8 trillion rupiah ($31.38 billion), or 2.29% of GDP, smaller than the finance ministry’s earlier estimate but bigger than that of 2023, official data showed on Monday.
Southeast Asia’s largest economy had previously estimated a budget gap of 2.7% of GDP for all of 2024. In 2023, it had a deficit of 1.61% of GDP.
The deficit forecast for 2025 is 2.53% of GDP.
In her presentation of the data, Finance Minister Sri Mulyani Indrawati described the 2024 deficit as “a foundation for an effective transition of government”, as Indonesia inaugurated Prabowo Subianto as its new president in October.
“This was far better than what we had expected in the middle of last year,” she said at a press conference, adding that tax revenues turned around to book positive growth in the final quarter, after a contraction in the first nine months of 2024.
The data showed there was 45.4 trillion rupiah of excess cash from higher debt issuance last year, which the government sometimes uses to reduce debt issuance plans in the following year.
Sri Mulyani said the smaller-than-expected deficit could also provide a strong foundation for the economy in 2025, which economists have cautioned could be an uncertain year due to changing policy in the United States under President-elect Donald Trump.
In Indonesia, financial markets have been monitoring the government’s fiscal policy after Prabowo said he wanted to be more daring with debt to fund his flagship programmes, which include providing free school lunches and significantly expanding farmland.
The “Free Nutritious Meals” programme, which has a budget of 71 trillion rupiah, was scheduled to begin on Monday.
In 2024, total revenues rose 2.1% from 2023 to 2,842.5 trillion rupiah. The government spent 3,350.3 trillion rupiah in total last year, up 7.3% from 2023.
Total (EPA:TTEF) expenditure planned for 2025 is 3,621.3 trillion rupiah.
Economic growth last year was estimated at around 5%, Sri Mulyani said, compared with 2023’s growth of 5.05%.
($1 = 16,180.0000 rupiah)
