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2025 Budget Deficit Still Being Discussed, Airlangga Says as Ministers Split Over Cap

Yustinus Paat
June 18, 2024 | 8:07 am
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Chief Economic Affairs Minister Airlangga Hartarto (right) and Finance Minister Sri Mulyani (center) on a container truck in Tanjung Priok, Jakarta on May 18, 2024. (Antara Photo/Rivan Awal Lingga)
Chief Economic Affairs Minister Airlangga Hartarto (right) and Finance Minister Sri Mulyani (center) on a container truck in Tanjung Priok, Jakarta on May 18, 2024. (Antara Photo/Rivan Awal Lingga)

Jakarta. Some top government officials are split over how much Indonesia should set its state budget deficit for next year, although senior minister Airlangga Hartarto said Monday that the House of Representatives was still discussing the exact cap.

Finance Minister Sri Mulyani earlier this month said that she was eyeing a 2025 budget deficit of between 2.45 and 2.82 percent of Indonesia's gross domestic product (GDP). The minister claimed that she had already taken into account all of the priority programs by the incoming government.

A day after Sri Mulyani’s remarks, National Development Planning Minister Suharso Monoarfa proposed that it would be best for the government to keep the deficit to no more than between 1.5 and 1.8 percent of GDP. Suharso said at the time that it would give “enough fiscal room” for the incoming government. As these clashing opinions made headlines, Chief Economic Affairs Minister Airlangga asked the press to wait for the exact figures as the House’s Budget Committee has yet to come to a conclusion on the 2025 budget deficit.

“The Budget Committee is still discussing the budget deficit. So just wait until they wrap up the discussions,” Airlangga told reporters in Jakarta.

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For reference, Indonesia’s budget deficit for 2024 stands at 2.29 percent of the country’s GDP. President-Office Prabowo will assume power this October, making 2025 his first year in office. One of Prabowo’s flagship programs includes feeding school children free lunches.

Airlangga also commented on Sri Mulyani’s plans to cut down the budget for some ministries next year. Again, Airlangga said there had not been a final decision yet, and the numbers that Sri Mulyani proposed were still subject to changes. He added: “Each ministry has its own minister. The respective ministries have their own programs, which they discuss together with their partners at the House.”

Sri Mulyani has proposed to cut the Investment Ministry’s budget from Rp 1.22 trillion (around $74 million) this year to Rp 681 billion in 2025. The same goes for the Trade Ministry, which is expected to only have Rp 1.65 trillion in 2025, lower than this year’s Rp 2 trillion. The Agricultural Ministry can only spend Rp 8.06 trillion in 2025, down from Rp 14.6 trillion the previous year. Sri Mulyani wants to lower the Industry Ministry’s budget from Rp 3.76 trillion to Rp 2.51 trillion. The Transportation Ministry will only get Rp 24.76 trillion in 2025, down from Rp 38.47 trillion. There are also plans to cut the Energy Ministry’s 2025 budget from Rp 6.77 trillion to Rp 3.9 trillion.

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