REPUBLIKA.CO.ID, JAKARTA -- Finance Minister Sri Mulyani Indrawati said the state budget deficit in the first half of 2018 was Rp110.6 trillion or 0.75 percent of the country's Gross Domestic Product (GDP). The deficit was smaller than Rp175.1 trillion or 1.29 percent of the GDP in the same period last year.

"The state budget deficit narrowed sharply in the past two years from 1.29 percent in 2017 and 1.82 percent in 2016," Sri Mulyani said at a working meeting with the Budget Body of the House of Representatives here on Tuesday.

Sri Mulyani said the state income was recorded at Rp833.4 trillion in the first half of the year as against spending of Rp944 trillion or 42.5 percent of the ceiling. The state income included Rp653.4 trillion in taxes, or 40.4 percent of this year's target, Rp176.8 trillion in non tax income or 64.2 percent of the target and Rp3.1 trillion in grant or 260.7 percent of the target.

"The tax revenues, which already reached 40.4 percent of the target showed an improvement in performance than in the same period last year when tax revenues were only 38.8 percent of the target," the minister said.

Meanwhile, state spending included central government spending reaching Rp558.4 trillion or 38.4 percent of the ceiling and transfers to the regions and rural funds totaling Rp385.5 trillion or 50.3 percent of the ceiling.

The spending by the central government included spending by the ministries and government agencies at Rp295.5 trillion or 34.9 percent of the ceiling and non ministry, agency spending at Rp262.4 trillion or 43.2 percent of the ceiling.

"The spending by the Ministries/government agencies in the first half of 2018 rose as a result of early auctions, acceleration in social aid , payments of civil servant annual bonuses and regional elections and preparations for Asian Games," Sri Mulyani said.

Altogether, the state budget deficit narrowed until the first half of 2018 partly because of surplus in primary balance of Rp10 trillion or an improvement from the years of 2015-2017 when it was always negative.

"The state budget performance in the first half of 2018 showed an improvement and was in the right course both in macro economic achievement and in state budget posture," the minister said.

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