The fiscal deficit is within the corridor
Indonesian Minister of Finance Sri Mulyani Indrawati reported to the Indonesian parliament on the country's fiscal performance, as well as the fiscal outlook for the year 2025. In the midst of skepticism about Indonesia's fiscal policy under the new president, Prabowo Subianto, she reported that the fiscal performance for first semester of 2025 and the fiscal outlook for the entire year of 2025 is predicted to be within the corridor, which is under 3% of GDP.
In the first semester of 2025 and in the midst of global challenges, government revenue was reported to have reached Rp.1,210.19 trillion. However, it showed signs of recovery at the end of the semester. In fact, revenue in June 2025 grew at the double-digit rate of 10.9%. In the meantime, government expenditures were reported to have reached Rp.1,407.1 trillion.
For full-year 2025 government revenue is forecast to reach Rp.2,865.5 trillion, while expenditures should reach Rp.3,527.5 trillion, which would lead to a deficit of Rp.662 trillion or 2.78% of GDP. This deficit is larger than the initial target of Rp.616 trillion, or 2.53% of GDP, but still within the deficit corridor of 3%.
In the meantime, the Central Board of Statistics in Indonesia released its balance of trade report for May 2025, which registered a much higher surplus than the previous month. It showed that the surplus returned to a normal pattern after an anomaly in April 2025 due to the Muslim holidays. The surplus in May 2025 was $4,301.5 million compared to $158.8 million in April 2025. The total trade surplus for the first five months of 2025 is $15,375.2 million, 17.7% larger than the $13,062 million achieved in the same period of the previous year.
Exports in May reached $24,613.8 million while imports were $20,312.3 million. Cumulative exports from January to May 2025 reached $111,977.4 million while cumulative exports for the same period of the previous year were $104,673.7 million. Cumulative imports in the first five months in 2025 reached $96,602.2 million, up from the previous year’s value of $91,611.7 million.
The Central Board of Statistics also reported the Consumer Price Index for June 2025, which registered inflation of 0.19%. With that monthly inflation, Y/Y inflation in June reached 1.87%, a level within the inflation target corridor administered by the Central Bank. Against that background, Bank Indonesia kept the benchmark rate constant at 5.5% at its policy meeting held on June 17-18, 2025.
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