The 2024 State Budget Deficit Is Predicted To Reach IDR 584 Trillion

Rupiah (photo: dock. Antara)

JAKARTA - Bank Permata economist Josua Pardede projects that the 2024 State Revenue and Expenditure Budget deficit (APBN) will reach IDR 584 trillion or 2.63 percent of Gross Domestic Product (GDP).

"We anticipate that the deficit in the 2024 State Budget will reach around 2.63 percent of GDP, or Rp. 584 trillion, by the end of the year," he explained to VOI, Wednesday, August 14.

Josua said that this projection is slightly lower than the government's projection which estimates a deficit of 2.70 percent of GDP.

According to Josua, the projection takes into account an increasing trend of spending realization in the fourth quarter, which is likely to push for a higher deficit.

However, Josua said that his party also observed that the impact of global uncertainty, especially geopolitical tensions in the Middle East and global interest rates that tend to remain high, may not be as severe as expected, thus potentially reducing spending realization by the end of the year.

Josua conveyed that considering that the government had indicated a shift in the main source of funding for the state budget deficit in the second half of 2024 from SBN financing to loan financing and the use of more budget balances (SAL).

"We believe that the financing needed through the issuance of SBN will be much lower than the target," he said.

Therefore, Josua said the pressure from higher bond supply in the market is expected to be limited by the end of 2024. Along with the increasing expectations of FFR reduction and BI-rate decline at the end of the year

"We estimate that the yields of 10-year government bonds will range from 6.50 percent-6.70 percent," he explained.