JAKARTA — The drop in Indonesian government’s revenues stabilized in July, although income from corporate tax for the first seven months of the year remained in contraction, Finance Minister Sri Mulyani Indrawati said on Tuesday.
The government ran a budget deficit that equaled 0.41 percent of gross domestic product (GDP), or 93.4 trillion rupiah ($5.9 billion), for the seven months ended July, the minister said in a press conference, bigger than the 0.34-percent deficit recorded in January to June.
Revenues totaled 1,545.4 trillion rupiah in the period, down 4.3 percent from the same period a year earlier, although the pace of decline slowed from the 6 percent fall in January to June, ministry data showed.
Spending up to July reached 1,638.8 trillion rupiah, up 12.2 percent year on year, reflecting expenditure for elections and the construction of Indonesia’s new capital city in Borneo.
“Tax revenues have improved, but pressure from declining commodity prices is still felt. Spending is on track,” Sri Mulyani said.
“Spending quality is important. Growth must be accompanied with quality, and we also must be careful to maintain the deficit outlook in the third and fourth quarters,” she said, adding she did not want the budget to deviate too much from plans.
Tax revenues from mining and manufacturing sectors shrank 54 percent and 14 percent, respectively, in January-July from the same period in 2023.
Last month, the minister said the 2024 budget deficit was expected to be 2.7 percent of GDP, higher than an initial target of 2.29 percent. Indonesia usually increases spending in the later part of the year, which often widens the budget deficit.
The minister did not provide a new forecast.
Sri Mulyani also said geopolitical tensions and global market uncertainty remained risks for the domestic economy.
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