Indonesia's Finance Minister Challenges World Bank's Deficit Projections

Government Confidence in Fiscal Management

Indonesia's Finance Minister, Purbaya Yudhi Sadewa, has dismissed the World Bank's warning about Indonesia's budget deficit potentially widening to 2.9% by 2027. Purbaya expressed skepticism about the World Bank's forecasting abilities, stating that their predictions frequently turn out to be inaccurate. The minister emphasized that the actual deficit size will depend on the government's effectiveness in controlling expenditure and enhancing revenue collection.

Technological Improvements in Revenue Collection

Purbaya highlighted recent advancements in tax administration, particularly the implementation of Artificial Intelligence (AI) at the Directorate General of Customs and Excise (DJBC). He noted that AI adoption has already yielded significant results, with a minimum gain of Rp 1 trillion. The minister expressed confidence that continued improvements in customs operations would lead to a substantial reduction in revenue leakage.

Government's Fiscal Management Strategy

The finance minister's response reflects the government's confidence in its fiscal management capabilities. The administration is focusing on enhancing revenue collection through technological upgrades and process improvements. Purbaya's remarks suggest that the government is not overly concerned about the World Bank's projections and is instead concentrating on implementing measures to strengthen fiscal discipline and improve tax compliance.