JAKARTA. The Institute for Development of Economics and Finance (INDEF) estimates that budget deficit will widen this year, reaching 2.8% of Gross Domestic Product (GDP) or Rp 486 trillion.
The estimated deficit is wider than the government's estimates at 1.76% or Rp 307.2 trillion.
INDEF economist Tauhid Ahmad said that the deficit is widening because the conditions that occurred in 2019 will continue in 2020. These conditions, he said, were not predicted by the government when deciding the 2020 State Budget in October 2019. The government at that time was too optimistic in setting the target of state revenue and expenditure, which apparently did not match expectations at the beginning of this year.
Tauhid gave an example that the government was optimistic in making tax revenue assumptions, which was estimated to grow by 13%, even though in reality, the growth every year only reach 8% -9%. "At that time the government was still optimistic, the global situation was still optimistic, the tax revenue was a little rocky but still optimistic. In my opinion, there was an error in the projections," he said.
If the conditions of 2019 continue to occur this year, the tax revenue will be affected and the shortfall will widen. If the tax revenue, which is the foundation of the government cannot be expected, and expenditure continues to be made, the government will add more debt. (AM/AR)