Indonesia Says It’ll Maintain Fiscal Deficit Even As Taxes Trail Forecasts

(Bloomberg) -- Indonesia is confident of meeting its fiscal deficit target this year even though tax collections have trailed forecasts, according to Indonesia’s Finance Minister Sri Mulyani Indrawati.

“We have confidence that we are going to maintain the deficit at 1.84 percent” as targeted in the budget, Indrawati said in an interview with Bloomberg Television’s Haslinda Amin in Chinag Rai in northern Thailand. “The objective of the government is not just collecting tax at all costs. We want the economy to create jobs, growth and reduce poverty.”

Indonesian policymakers are projecting growth next year as high as 5.5 percent even as the global economy is slowing, putting the nation on track to post its fastest pace of expansion since 2013. Still, the government is aware that external pressures will pose their own challenges.

“We are all seeing and anticipating that the global economy is going to be in a weakening level of growth,” Indrawati said. “The problem that we are going to address is whether each policy maker has policy space to respond.”

A trade agreement between the U.S. and China could “create huge confidence for the global economy,” Indrawati said.

--With assistance from Karlis Salna.

To contact the reporters on this story: Viriya Singgih in Jakarta at vsinggih@bloomberg.net;Michelle Jamrisko in Singapore at mjamrisko@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Thomas Kutty Abraham, Chris Bourke

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