Indonesia’s budget deficit expects to hit at 2.7% of GDP: minister

JAKARTA: Indonesia’s budget deficit is expected to reach at 2.7 percent of its GDP this year in the “worst case scenario,” a minister said here the other day.

That will be the highest level for the central government allowed by the country’s law, Finance Minister Bambang Brodjonegoro said.

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According to Indonesia’s state treasury law, the government budget deficit could be as big as 3 percent of the GDP.

“The level of 2.7 percent of the GDP is the worst case scenario,” which would occur if the tax revenue failed to reach the set target, he said.

The tax revenue might only reach 85 to 87 percent of the target of this year, the minister added.

Earlier this month, a finance ministry official expected the government to run a fiscal deficit equivalent to 2.59 percent of the nation’s GDP.