JAKARTA: Indonesia’s budget deficit narrowed in 2016, the finance minister said on Tuesday, as major spending cuts helped offset less-than-expected revenue from a tax amnesty programme.
The budget deficit for Southeast Asia’s largest economy was estimated at 2.46 per cent of gross domestic product, down from 2.58 per cent in 2015. A final audited estimate will be released later this year.
Finance Minister Sri Mulyani Indrawati, who was appointed from the World Bank in July, made it her top priority to fix a budget she initially considered not credible. Among her first measures as minister was cutting spending by 133.8 trillion rupiah (S$14.3 billion). “The budget deficit was managed at 2.46 per cent because we were able to cut and delay some spending,”Ms Indrawati said.
She said the government did not manage to meet its 2016 revenue target set in June. Lower returns from the amnesty programme, income tax and other tax revenue left a 234 trillion rupiah gap.
