A worker walks past a skyscraper in Kuningan, Jakarta. (Antara Photo/Dhemas Reviyanto)

Second Revision to State Budget Expected as Gov't Expands Covid-19 Relief Package


JUNE 05, 2020

Jakarta. Indonesia's state budget deficit is set to widen further this year as the government projects lower tax revenue despite bills piling up for its Covid-19 mitigation programs. 

The Finance Ministry now expects Rp 1,033 trillion ($74 billion) in deficit, or 6.34 percent of the country's gross domestic product (GDP).  

The ministry's previous projection was Rp 852.9 trillion, or 5.07 percent of GDP. 

Febrio Kacaribu, the head of Fiscal Policy Agency (BKF) at the Finance Ministry, said President Joko "Jokowi" Widodo will soon issue another presidential regulation to formalize a second revision to the 2020 state budget. 

"The [first] presidential regulation was issued on April 5. We've already discussed the second one in a cabinet meeting," Febrio said on Thursday.

According to Febrio, state revenues are expected to drop to Rp 1,699  trillion from the projected Rp 1,761 trillion. 

Tax, customs and excise revenues are expected to shrink to Rp 1,405 trillion from the Rp 1,463 trillion outlook. 

Non-tax revenues are expected to reach Rp 291 trillion, bringing the total amount of state revenues to Rp 1,699 trillion.

Spending would swell by Rp 124.5 trillion to Rp 2,738 trillion from the previous outlook of Rp 2,613.8 trillion, as the government increases spending for Covid-19 mitigation and its economic recovery program. 

Expenses for the government's Covid-19 mitigation efforts have increased to Rp 73 trillion. 

The government also has to spend another Rp 76 trillion to pay for electricity subsidy.

To save money, it has already cut spending at ministries and other government institutions to Rp 787 trillion from Rp 837 trillion. 

Meanwhile, non-ministerial expenditure has increased to Rp 1,187.9 trillion, including Rp 590 trillion for the economic recovery program. 

The Village Fund budget has also slightly increased to Rp 764 trillion from Rp 763 trillion.