Indonesia's 2025 Budget Deficit to Exceed 2.78% of GDP

Economic Challenges Impact Fiscal Performance

Indonesia's Finance Minister, Purbaya Yudhi Sadewa, revealed that the country's 2025 budget deficit is projected to surpass the initial outlook of 2.78% of GDP but will remain within the statutory limit of 3% of GDP as mandated by Law No. 17/2003 ²

. This development comes as tax revenues for 2025 fell significantly short of expectations. By November 2025, tax collection reached only Rp 1,634.43 trillion, representing 74.65% of the targeted Rp 2,189 trillion ¹

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https://finance.detik.com/berita-ekonomi-bisnis/d-8287103/pengakuan-purbaya-soal-kondisi-ekonomi-jelek-9-bulan-pertama

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Factors Contributing to Revenue Shortfall

The shortfall in tax revenue was primarily attributed to the slowing economic conditions experienced during the first nine months of 2025. Finance Minister Purbaya acknowledged that the economic slowdown negatively impacted tax collection efforts ¹

. Additionally, certain tax collection measures were postponed in response to the challenging economic environment.

Government Response and Outlook

In response to these challenges, the government implemented counter-cyclical policies aimed at supporting economic recovery without overburdening the economy. Purbaya expressed optimism that the economic situation would show significant improvement by the second quarter of 2026, stating that the government's policies were designed to facilitate a smoother recovery process ¹

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Implications and Future Prospects

The budget deficit projection and tax revenue shortfall highlight the complexities of managing Indonesia's fiscal landscape amid economic uncertainties. While the government remains committed to maintaining fiscal discipline within legal boundaries, the current fiscal performance underscores the need for continued economic stimulus and careful financial management.