Sri Mulyani Brings Good News: The 2021 State Budget Deficit Is Projected To Be Lower Than The Target Of 5.7 Percent Of GDP

Minister of Finance Sri Mulyani Indrawati (Photo: Instagram @smindrawati)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani said that the estimated 2021 APBN deficit would be between 5.1 percent to 5.4 percent of gross domestic product (GDP). According to the Minister of Finance, this outlook is lower than the deficit level stated in the APBN Law, which is 5.7 percent of GDP

“This year, the budget is designed with a deficit of 5.7 percent. But due to the strong recovery as well as from the income and commodity boom, we expect the deficit to remain at 5.1 percent to 5.4 percent of GDP, much lower than we previously planned," he said via a virtual channel at the World Bank discussion forum, Thursday, December 16th.

To note, the deficit of 5.7 percent is an estimated budget shortfall which is estimated to reach IDR 1,006,4 trillion. Meanwhile, the realization as of September 30 was Rp.452 trillion, equivalent to 2.74 percent of GDP.

The Minister of Finance added that for the 2022 period, the deficit figure is pegged at the level of 4.8 percent of GDP. However, this figure does not take into account the Law on the Harmonization of Tax Regulations which has the potential to provide additional revenue and economic recovery programs in 2021 which will have a positive impact in various sectors.

"This design does not take into account several reforms in the field of taxation and the fiscal side," he said.

Furthermore, the state treasurer emphasized that the government will continue to work better to restore the Indonesian economy in 2022. The Minister of Finance believes that the role of fiscal policy is still very important, especially during the COVID-19 pandemic.

It is said that next year's APBN will continue to support the recovery process by prioritizing spending on human resource development, education, health, and social spending.

“Hopefully, the growth rate will recover above 5 percent. In the 2022 State Budget, we put 5.2 percent for economic growth until 2022," closed the Minister of Finance Sri Mulyani.