, Indonesia

Indonesia's fiscal deficit pegged to hit 2.2% of GDP

Maintaining a tight fiscal stance could be difficult next year.

According to Nomura, Indonesia's government has agreed on the fuel consumption assumption of 48mn kilolitres, which is essentially the same as in 2013. The MOF assumes fuel subsidy of IDR210.7trn.

"We are pessimistic on this, given the relatively steady growth in automobile and motorcycle sales. The government currently budgeted for a 2014 fiscal deficit at 1.5% of GDP.

However, given next year will be an election year, maintaining the relatively tight fiscal stance could prove challenging. We forecast a 2014 deficit at 2.2% of GDP," says Nomura.

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