Indonesia recorded a 10.3 trillion rupiah ($717.87 million) budget surplus in the first quarter of 2022, equivalent to 0.06% of gross domestic product, as high commodity prices and an improving domestic economy boosted revenue, its finance minister said.
The surplus was in stark contrast to 2021’s 143.7 trillion rupiah budget deficit, when the country’s fiscal position was under greater strain due to the impact of the Covid-19 pandemic.
Sri Mulyani Indrawati also told an online news conference on Wednesday the surplus had helped Indonesia to reduce its bond issuance, but said the government would keep monitoring the bond market amid global monetary tightening.
Total revenue in the January-March quarter surged 32.1% from the same period last year to 501 trillion rupiah, while spending fell 6.2% to 490.6 trillion rupiah, the minister said.
Tax revenue is set to increase further in April, after the government raised value added tax rate for most goods and services by 1 percentage point to 11%.
Despite the budget’s stronger position, Sri Mulyani noted that rising commodity prices had also raised Indonesia’s spending on subsidies.
The subsidy bill in the first quarter, including for energy, fertiliser, interest payments on microloans and carry-over payables from last year, jumped to 38.51 trillion rupiah, from 21.38 trillion rupiah in the same quarter in 2021.
Deputy finance minister Suahasil Nazara said the government was still weighing up whether to adjust energy prices to contain spending on subsidies but said the main focus remained supporting Indonesia’s economic recovery from the pandemic.
- Reuters, with additional editing by George Russell