2024 Budget well executed

INDONESIA - Report 31 Jan 2025 by Cyrillus Harinowo

The Indonesian Ministry of Finance reported the performance of Indonesian Government Budget for the year 2024. The budget had faced a huge challenge due to the volatility of commodity prices, the general election and the transition to the new presidency. However, the Ministry of Finance reported that the deficit for the year managed to come in at 2.29% of GDP, a level that was predicted during the first cycle of the budget but was significantly lower than the outlook in mid-2024.

Total government revenue in 2024 reached Rp.2,842.5 trillion, which was 101.4% of the target. At the same time, total government expenditure reached Rp.3,350.3 trillion or less than 1% above the target of Rp.3,325.1 trillion. Given these figures, Indonesia's government budget for 2024 registered a deficit of Rp.507.8 trillion, or 2.29% of GDP.

The government deficit in 2024 led government debt to rise, reaching Rp.8,560.36 trillion in November 2024, or 39.20% of GDP. This compares to Indonesia's government debt to GDP in November 2023, which stood at Rp.8,041.01, or 38.11% of GDP.

Meanwhile, the Central Board of Statistics reported that the trade balance in December 2024 resulted in a surplus, although it was lower than the surplus achieved in November 2024. Exports December were $23,461 million, while imports were $21,222.1 million. The trade surplus for December 2024, at $2,238.9 million, was lower than surplus reached in November of $4,366.5 million.

Cumulative exports for full-year 2024 reached $264,703 million, while cumulative imports for the same period reached $233,659.5 million. Therefore, the cumulative surplus for full-year 2024 was $31,043.5 million, lower than the surplus for 2023, which reached $36,888.2 million. One of the drivers of the lower surplus in 2024 was the trade balance with China, which was a surplus for Indonesia in 2023, but turned into a large deficit in 2024.

The Central Board of Statistics also reported the Consumer Price Index for the month of December 2024. M/M inflation in December 2024 was 0.44%, with Y/Y inflation at 1.57%. Given that situation, Bank Indonesia decided to cut the benchmark interest rate by 25 basis points to 5.75% at its monthly meeting of the Council of the Governors held on January 15, 2025.

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