ASEAN KEY DESTINATIONS
Budget deficit to stand at 2.1% of GDP: Govt
The government says the deficit in the draft 2016 state budget bill (RAPBN) is set to reach Rp 273.2 trillion (US$19.94 billion) or 2.1 percent of the gross domestic product (GDP) while state expenditure and income are expected to reach Rp 2.12 quadrillion and Rp 1.85 quadrillion respectively.
“The budget deficit in the 2016 RAPBN is proposed to reach Rp 273.2 trillion,” said President Joko “Jokowi” Widodo as quoted by Antara when he conveyed the 2016 RAPBN and the state financial note in a House of Representatives’ plenary meeting in Jakarta on Friday.
Of the total state expenditure, Rp 1.34 quadrillion would be allocated for the central government, comprising Rp 558.7 trillion for ministries and non-ministry government institutions’ spending and regional transfer funds while Rp 782.2 trillion would be used as village funds.
In terms of financing, President Jokowi said the government would take several initiatives such as directing the use of loans for productive activities, to empower the roles of the private sector, state-owned enterprises and local administrations in accelerating infrastructure development and to carry out creative innovations on financing instruments.
As a consequence of Indonesia’s infrastructure development acceleration, Jokowi said, the government needed an expansive fiscal policy and this would eventually lead to a budget deficit.
“To support the implementation of the fiscal policy, we will cover the budget deficit with domestic and foreign financing sources,” said the President in the plenary meeting led by House speaker Setya Novanto.
Jokowi said Rp 1.56 quadrillion out of the total 1.85 quadrillion of state income would come from tax revenues while Rp 280.3 trillion would be from non-tax state revenues and Rp 2 trillion from grants.
“Therefore, the budget deficit will amount to Rp 273 trillion or 2.1 percent of the GDP,” he said.
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