Jakarta (Indonesia Window) – Indonesia’s state revenues are predicted to reach 109.5 percent of the national state target of 1,743.6 trillion rupiahs (some 122.2 billion U.S. dollars), by December 2021, according to the Coordinating Ministry for Economic Affairs.

"Basically, our state income has increased from the target due to the increase in the global commodity prices and improvement in the economic activities," the coordinating ministry’s first executive secretary Raden Pardede said in a virtual press conference at the Indonesia Economic Forum here on Tuesday (Nov. 23).

Thus, the state budget deficit would also decrease from the initial estimate of 5.7 percent of the Gross Domestic Product (GDP), to below five percent of GDP.

The estimated realization of state revenues is based on the performance of the 2021 state budget till October, in which the state revenues have reached 86.6 percent of the target, at 1,510 trillion rupiahs (some 105.8 billion dollars).

In addition, Raden predicted the realization of state spending by the end of this year would reach 94.6 percent of the target of 2,750 trillion rupiahs (about 192.7 billion dollars).

With that realization of the state revenues and expenditures until October 2021, the budget deficit has only reached 3.29 percent of the GDP or 548.9 trillion rupiahs (some 38.4 billion dollars).

Raden said the state budget deficit was expected to become lower and lower. At 4.9 percent of the GDP in 2022, and below three percent of the GDP in 2023.

The low deficit next year is likely due to the improving tax revenue, although it has not been affected by the newly taxation rules of the Law on Harmonization of Tax Regulations.

Reporting by Indonesia Window