Indonesia's 2021 fiscal deficit seen expanding to 5.2% of GDP: finance minister

FILE PHOTO: Indonesian Finance Minister Sri Mulyani Indrawati during an interview with Reuters ahead of the G20 summit in Hamburg, Germany, July 6, 2017. REUTERS/Wolfgang Rattay

JAKARTA (Reuters) - Indonesia’s government will propose to parliament expanding its 2021 fiscal deficit assumption in Southeast Asia’s biggest economy to 5.2% of gross domestic product (GDP), Finance Minister Sri Mulyani Indrawati said on Tuesday.

Speaking after a cabinet meeting, she said President Joko Widodo wanted more fiscal room next year to weather uncertainty over the end of coronavirus pandemic and the availability of a vaccine.

“With a 5.2% of GDP deficit we will have 179 trillion rupiah ($12.36 billion) additional spending room that will be prioritised for economic recovery next year,” Indrawati said.

The government is yet to specify total spending allocated for its 2021 state budget.

Indrawati has previously said the 2021 fiscal deficit was expected to be between 4.17%-4.7% of GDP.

The budget assumes the economy will grow 4.5%-5.5% next year, but Indrawati said the government will push to reach the higher end of the growth target range.

Reporting by Maikel Jefriando; Writing by Fransiska Nangoy; Editing by Ed Davies