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Today's Headlines Budget Deficit

  • Moody's: Indonesia's Budget Deficit Under Control After Fuel Price Hike

    Credit rating agency Moody's Investors Service stated in a report released on Monday (24/06) that it is positive about the impact of the increase in price of subsidized fuel in Indonesia. Through this measure, the budget deficit of the Indonesian government is estimated to remain within 3 percent of GDP (the maximum threshold that is set by the government). Last Saturday (22/06), the price of gasoline was raised by 44 percent to IDR 6,000 and the price of diesel by 22 percent to IDR 5,500 despite widespread protests across the country.

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  • New Macroeconomic Assumptions in Indonesia's Revised State Budget

    DPR MPR Building Government of Indonesia Investments

    After a long plenary session on Monday (17/06), Indonesia's House of Representatives (DPR) and the government have agreed to the revised 2013 State Budget (APBN-P). The revision was needed as original macroeconomic assumptions began to fall out of tune with reality. Due to global and domestic conditions a number of assumptions needed to revised down. Most controversial decision that was taken is the increase in price of subsidized fuel by 44 percent to IDR 6,500 (USD $0.66) per liter.

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  • No Decision Yet on Price Increase Indonesia's Subsidized Fuel

    Fuel Increase Indonesia June 2013 Indonesia Investments

    The plenary session of Indonesia's House of Representatives (DPR) is still ongoing as the various political parties could not agree yet on the increase in the price of subsidized fuel. Five political parties agree to the price hike, while four others have rejected it. If the political parties can not agree to the proposal, then it will be decided by individual voting starting from midnight (Indonesian time). The price hike has been long awaited as a measure to relieve pressure on Indonesia's budget deficit.

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  • Indonesian Government Announces Subsidized Fuel Price Hike on Monday

    Indonesia's Subsidized Fuel 17 June 2013 - Indonesia Investments

    Today (15/06), it was reported in Indonesia's media that the government will announce details regarding the new price of subsidized fuel on Monday (17/06) after a plenary session of the House of Representatives (DPR). The Union of Indonesian Workers (Konfederasi Serikat Pekerja Seluruh Indonesia) has announced that it will stage a large demonstration on 17 or 18 June at the DPR/MPR building (the seat of the government) in Indonesia's capital city as well as smaller demonstrations in various cities across the archipelago.

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  • Indonesia's Subsidized Fuel Price Will Rise to Relieve Government Budget Balance

    This morning (30/04/13), president Susilo Bambang Yudhoyono delivered a speech in which he announced that the price of subsidized fuel will increase to relieve mounting pressures on the government budget deficit. Yudhoyono refrained from mentioning a new price level nor did he announce when the new measure will be implemented. He said that cash compensation programs for the poor need to be prepared first before adjustment of the country's subsidized fuel price can be executed.

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Latest Columns Budget Deficit

  • Despite Deviations Indonesia Won't Revise the 2018 State Budget

    Despite Deviations Indonesia Won't Revise the 2018 State Budget

    The Indonesian government decided not to revise its 2018 State Budget despite the fact that a couple of assumptions in the budget - such as the rupiah exchange rate or the oil price - differ markedly from the actual (real) level in the first half of 2018. After a meeting at the Presidential Palace in Bogor, Finance Minister Sri Mulyani Indrawati told reporters that President Joko Widodo will not adjust these assumptions due to a number of considerations.

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  • Weak Tax Revenue Indonesia in 1H-2016, Spotlight on Tax Amnesty

    Weak Tax Revenue Indonesia in 1H-2016, Spotlight on Tax Amnesty

    Indonesia's tax revenue realization in the first half of 2016 was disappointing. According to the latest data, Southeast Asia's largest economy collected a total of IDR 518.4 trillion (approx. USD $39.6 billion) worth of tax revenue (including customs and excise) in the first six months of 2016, down 3.3 percent (y/y) from tax revenue realization in the same period one year earlier, and only 33.7 percent of total targeted tax revenue (IDR 1,539.2 trillion) set in the revised 2016 State Budget. The disappointing performance is mainly due to weak tax income from the oil and gas sector.

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  • Indonesia's House Passes Tax Amnesty Bill & Revised State Budget

    In a plenary session on Tuesday (28/06), Indonesia's House of Representatives (DPR) passed the controversial Tax Amnesty Bill into law as well as the revised 2016 state budget. The Indonesian government will be relieved to see the Tax Amnesty Bill come into effect on 1 July 2016 (ending in May 2017) as it expects the bill to boost tax revenue this year by IDR 165 trillion (approx. USD $12.4 billion). Through tax incentives and the pardoning of tax crimes, the tax amnesty program makes it attractive for tax evaders to declare their offshore assets and repatriate these into Indonesia.

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  • Bond Market Indonesia: Euro Bonds Sales a Success, Samurai Bonds Next

    Bond Market Indonesia: Euro Bonds Sales a Success, Samurai Bonds Next

    The Indonesian government sold €3 billion worth of euro-denominated bonds (Surat Utang Negara, or SUN) on Tuesday (07/06) consisting of €1.5 billion of 7-year tenure bonds with a yield of 2.772 percent and €1.5 billion of 12-year tenure bonds with a yield of 3.906 percent. Combined, the issuance was oversubscribed 1.79 times with a total book order for the dual-trance bonds at €8.36 billion. Robert Pakpahan, Director General of Financing and Risk Management at Indonesia's Finance Ministry, said funds will be used to finance the 2016 budget deficit, which is expected to widen to 2.48 percent of GDP.

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  • Reforming Indonesia's Tax System is Key to Unlock S&P's Investment Grade

    Reforming Indonesia's Tax System is Key to Unlock S&P's Investment Grade

    In the past two weeks, two of the big international credit rating agencies released new reports about Indonesia's fiscal situation. Both agencies affirmed Indonesia's sovereign debt rating: Fitch Ratings kept Indonesia at BBB-/stable (investment grade class) and Standard & Poor's (S&P) maintained Indonesia at BB+/positive (highest junk level, one notch below investment grade). S&P's decision to keep Indonesia within the junk level category was met with disappointment among investors and Indonesian government officials but perhaps not that surprisingly.

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  • Government Revenue Collection Indonesia at 23% of 2016 Target in Early May

    Government Revenue Collection Indonesia at 23% of 2016 Target in Early May

    So far this year, realization of government revenue in Indonesia (up to 8 May 2016) has reached IDR 419.2 trillion (approx. USD $32 billion), roughly 23 percent of the full-year revenue target in 2016 (IDR 1,822.5 trillion). This result is weaker compared to last year when the government collected IDR 476.3 trillion in the period 1 January - 15 May 2015, or 27 percent of the full-year target. Meanwhile, government spending reached IDR 586.8 trillion between 1 January and 8 May 2016, or 28 percent of the full-year target (IDR 2,095.7 trillion), roughly the same as government spending during the same period last year.

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  • Indonesian Stocks & Rupiah End Week on a Positive Note

    Indonesian Stocks & Rupiah End Week on a Positive Note

    The Indonesian rupiah exchange rate and Indonesian stocks gained on the last trading day of the week in line with the performance of other emerging markets. Indonesia’s benchmark stock index (Jakarta Composite Index, abbreviated IHGS) rose 0.09 percent to 5,216.67 points, while the rupiah appreciated 0.22 percent to IDR 12,647 according to the Bloomberg Dollar Index. The positive performance was mainly caused by speculation that the unexpected fall in US wages will keep the US central bank from raising its key interest rate soon.

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  • Indonesia’s House Approves 2015 State Budget; Budget Deficit 2.21% of GDP

    Indonesia’s House Approves 2015 State Budget; Budget Deficit 2.21% of GDP

    Indonesia’s House of Representatives (DPR) approved the 2015 State Budget on Monday (29/09) that was proposed by the outgoing President Susilo Bambang Yudhoyono administration. The budget deficit is now set at IDR 245.9 trillion (USD $20.5 billion), equivalent to 2.21 percent of gross domestic product (GDP), and lower than the 2.32 percent of GDP proposed by the government in both the Financial Memorandum and the Revised 2015 State Budget. However, the accepted budget deficit is still high compared to previous years.

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  • Indonesia Rupiah Exchange Rate Update: Continued Depreciation

    Indonesia Rupiah Exchange Rate Update: Continued Depreciation

    The Indonesia rupiah exchange rate depreciated 0.16 percent to IDR 11,992 per US dollar on Monday (23/06) according to the Bloomberg Dollar Index, thus extending the currency’s recent depreciating trend. Meanwhile, Bank Indonesia's benchmark rupiah rate (known as the Jakarta Interbank Spot Dollar Rate, or, abbreviated JISDOR) depreciated 0.03 percent to IDR 11,971 against the greenback. What were the factors that influenced the rupiah’s performance today?

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  • Government and Parliament Agree on Indonesian Revised 2014 State Budget

    Government and Parliament Agree on Indonesian Revised 2014 State Budget

    In a plenary session of Indonesia’s House of Representatives (DPR) on Wednesday evening (18/06), the parliament approved the government’s proposed revised state budget of 2014 (RAPBN-P 2014). Prior to this approval, the revision had already been discussed for a month between the House of Representatives’ Budget Committee (Banggar) and the government. Almost all components of the 2014 State Budget have been revised from the government’s earlier assumptions.

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