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Indonesia expects 2022 fiscal deficit to shrink to 4.3% of GDP: Media

Indonesia expects 2022 fiscal deficit to shrink to 4.3% of GDP: Media

FILE PHOTO: People wearing protective masks shop at the Gasibu street market amid of the Coronavirus disease (COVID-19) pandemic in Bandung, West Java province, Indonesia, October 31, 2021. REUTERS/Willy Kurniawan

JAKARTA: Indonesia's fiscal deficit this year is expected to shrink to 4.3 per cent of gross domestic product, narrower than the 4.85 per cent initially predicted, media reported, citing the finance ministry's head of fiscal policy office.

A smaller fiscal deficit means the government could reduce its bond issuance target for 2022.

An uptrend in commodity prices already gave some windfall revenues for Southeast Asia's largest economy last year, which helped the government to sharply reduce the 2021 budget deficit to 4.65per cent of GDP, from a 5.7 per cent gap approved by parliament.

Finance ministry official Febrio Kacaribu told a briefing about new tax measures passed in October, such as the valued added tax hike, a higher tax rate for the high income earners, the cancellation of corporate tax cut and a tax amnesty programme, would boost 2022 revenue collection, media reported.

The government also expected a stronger economic recovery from the COVID-19 pandemic and high commodity prices to support 2022's tax take, Febrio was cited as saying.

Source: Reuters/gs

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