Tax Windfall Cuts Indonesia Budget Deficit to Pre-Pandemic Level

Indonesia’s budget deficit ratio fell to a three-year low as a surge in company earnings and consumer spending pushed tax revenue beyond the government’s target.

The deficit stood at 2.38% of gross domestic product as of end-2022 as state earnings rose 30.6%, Finance Minister Sri Mulyani Indrawati said in a briefing on the unaudited figures. That means Southeast Asia’s largest economy has made good on its pledge to return the fiscal deficit within its 3% legal limit one year early.

The “deficit decline is getting sharper as Indonesia continues to manage economic recovery while restoring the budget’s health and ...