Indonesia's 2025 Budget Deficit Expansion

Widening Deficit Beyond Initial Projections

Indonesia's budget deficit for 2025 is anticipated to exceed the initially projected 2.78% of the country's Gross Domestic Product (GDP), attributed largely to tax revenue shortfalls. This development was confirmed by Finance Minister Purbaya Yudhi Sadewa, who emphasized that despite the widening deficit, it would not breach the legally mandated 3% threshold of GDP.

Factors Contributing to the Deficit Expansion

The primary factor contributing to the deficit expansion is the underperformance of tax revenue. As of the end of November 2025, tax receipts only reached 78.7% of the projected target, indicating a significant shortfall. Minister Sadewa attributed this underperformance to various factors affecting the economy but did not provide a detailed breakdown of the shortfall amount or the exact deficit figure, citing the need for further data reconciliation.

Assurance on Deficit Management

Despite the challenges, the Finance Minister reassured that the government is committed to managing the deficit effectively, ensuring it remains within the legally permissible limit. This commitment is crucial for maintaining fiscal discipline and bolstering investor confidence in the Indonesian economy.

Upcoming Disclosure of Detailed Financial Data

Minister Sadewa has promised to present a comprehensive overview of the 2025 budget realization, including detailed financial data, in the following week. This disclosure will provide clarity on the final deficit figure and the extent of the tax revenue shortfall, offering insights into the government's fiscal management and economic strategies for the upcoming year.