Indonesia's 2008 budget deficit is likely to be a lower-than-targeted 1.1% of gross domestic product (GDP) due to higher tax revenue and improved cost efficiency, a top finance ministry official said on Thursday, Reuters reported. The finance ministry had previously forecast a deficit of 1.3%.
"We project a budget deficit at 1.1% of GDP, or around Rp51 trillion," Abimanyu said, adding that the lower-than-expected budget spending was the result of enhanced efficiency in government.
The ministry targeted Rp895 trillion of revenue in its revised 2008 budget, with revenue from tax expected to reach Rp609.2 trillion.
The ministry regularly holds debt auctions every month to finance its budget deficit but in October had said it might cancel its planned domestic debt auctions this year due to turmoil in financial markets.
The ministry had bought back Rp41 billion ($3.37 million) worth of bonds and the central bank bought Rp333 billion worth of bonds in the secondary market as part of the authorities' measures to restore investor confidence and stabilize financial markets.