The spending is mostly used for the handling of COVID-19 and providing social assistance.
Jakarta (ANTARA) - The Indonesian government has projected that the state budget (APBN) deficit will reduce to 5.2–5.4 percent of the gross domestic product (GDP), or equal to Rp873.6 trillion, by the end of 2021.

The number is smaller than the initial projection in the 2021 APBN Law of 5.7 percent of the GDP or Rp1,006.4 trillion, Finance Minister Sri Mulyani Indrawati noted after a plenary cabinet meeting at the Presidential Office in Jakarta on Wednesday.

The estimated reduction is due to increasing state revenues, as Indonesia’s overall revenue has grown by 18.2 percent as of the end of October 2021, she explained.

By the end of October, tax revenue had increased 15.3 percent, while during the same period in 2020, it had contracted by 18.8 percent, the minister said.

In addition, customs revenue and non-tax state revenues (PNBP) grew by 25.5 percent and 25.2 percent, respectively, until the end of October 2021, she added.

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Last year, customs revenue increased by just 5.5 percent, whilst PNBP contracted by 16.3 percent, Indrawati said.

"Thus, at the same period in 2020, the state revenue contracted 15.3 percent," the minister noted.

Furthermore, she informed that until the end of October 2021, central government spending grew 5.4 percent compared to the same period the previous year.

In fact, it is estimated to grow higher to reach 10.4 percent by the end of 2021 as the ministries and institutions’ spending has also increased significantly by 14.8 percent, she said.

"The spending is mostly used for the handling of COVID-19 and providing social assistance," Indrawati remarked.

Meanwhile, there are still obstacles to spending on financial transfers to the region and village funds (TKDD), which contracted by 7.9 percent, she informed.

"If it can be completed in one and a half months, it is likely that the TKDD growth will be flat compared to last year," the minister remarked.

However, since the overall achievements of state revenues have shown positive improvement in the APBN, the 2021 APBN deficit is expected to be less than the prior assumption, she said.
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Translator: Indra Pribadi, Uyu Liman
Editor: Suharto
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