Finance Minister Sri Mulyani Indrawati (Photo: Bloomberf)

This is the first time the state budget deficit has reached beyond 3 percent since the government relaxed the legal limit through the Law No. 2/2020 to help fund the fight against the pandemic.

The government expects the budget deficit to reach 6.34 percent this year, up from the initial deficit cap of 3 percent, as it allocated 695.2 trillion Rp worth of stimulus to rescue the economy.

The Finance Ministry’s data show that the country had collected 1.03 quadrillion Rp in state revenue as of August, marking a decrease of 13.1 percent year-on-year (yoy) following a drop in both tax revenue and non-tax income. The collected figure is about 60.8 percent of this year’s revenue target.

Tax revenue, the main source of income for the government, fell 15.6 percent yoy to 676.9 trillion Rp due to a sharp fall in corporate taxes and import taxes amid slowing economic activity.

Meanwhile, state expenditure rose 10.6 percent yoy to 1.53 quadrillion Rp during the same period, or 56 percent of this year’s target. Central government expenditure rose 14 percent to 977.3 trillion Rp driven by higher social and stimulus spending. It had spent around 36 percent of the 695.2 trillion Rp COVID-19 stimulus budget as of September 19./.

CPV (Source: VNA)