Indonesia parliament approves revised 2015 budget with 1.9 per cent GDP deficit

JAKARTA - Indonesia's parliament on Friday approved a revised 2015 state budget with a deficit of 1.90 per cent of GDP, lower than the 2.21 per cent in an initial budget approved in September before Joko Widodo became president.

The budget calls for spending this year of 1,984.1 trillion rupiah (S$211 billion), or 2.7 per cent less than the 2,039 trillion rupiah called for in the initial plan.

Meanwhile, 2015 state revenue is targeted at 1,761.6 trillion rupiah, 1.8 per cent less than in the initial budget.

To help fund the 222.5 trillion rupiah gap, parliament has authorised the Finance Ministry's financing and risk management office to issue bonds worth 297.7 trillion rupiah, not including issuance of bonds for buy-back plans, refinancing other matured loans and short-term bonds for cash management.

The revisions to the 2015 budget reflect President Widodo's reform agenda, including a roughly 50 per cent increase for infrastructure spending, 39.9 trillion rupiah injection to state firms, and a much-reduced allocation for energy subsidies.

In September, the administration of then-President Susilo Bambang Yudhoyono and parliament approved a baseline 2015 budget, which has funded the government's basic operational cost. Widodo became president in October.