Finance Update: Preliminary Data Show Improving Conditions in 2018
Despite challenging circumstances that trigger capital outflows from emerging markets – mostly related to the ongoing tariff war between the United States and China, monetary tightening in developed nations, US President Donald Trump’s unpredictable style of leadership, and rising crude oil prices in the first three quarters of the year (that cause pressure on net oil importers) – Indonesia ended 2018 in good financial health.
Based on the preliminary data, Indonesian Finance Minister Sri Mulyani Indrawati stated that she is satisfied with the realization of the 2018 (revised) state budget as almost all components show an improvement.
Indonesia’s budget deficit was only 1.72 percent of the nation’s gross domestic product (GDP) in 2018, hence posting the smallest fiscal deficit over the past six years. Moreover, the deficit was significantly lower than the government's original budget deficit target of 2.19 percent of GDP for full-year 2018, and lower than the latest estimate of 1.83 percent. For comparison, the budget deficit of Indonesia had reached 2.51 percent of GDP in 2017. That relatively high deficit had made some people nervous as it seemed heading toward the legal cap.
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This articles discusses:
• performance of the (revised) 2018 state budget, in particular the budget deficit, state revenue, tax revenue, and government spending.
• the current account balance
• the banking industry (and the challenges in this industry in 2019)
Read the full article in the December 2018 edition of our monthly research report. You can purchase this report by sending an email to info@indonesia-investments.com or a WhatsApp message to the following number: +62(0)8788.410.6944
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