JAKARTA: Indonesia’s central bank governor said on Friday he was not worried that the government’s fiscal deficit this year might reach 2.23 percent of gross domestic product, significantly higher than in the budget.
The government will not issue additional bonds but will use foreign loans to cover any increase in the deficit, Agus Martowardojo told reporters.
“The government does not have a plan to issue additional bonds, but will get foreign loans,” he said.
On Wednesday, Finance Minister Bambang Brodjonegoro said the 2015 fiscal deficit might be 2.23 percent instead of the 1.9 percent in the revised budget. Also on Friday, Martowardojo said that Bank Indonesia would maintain its tight monetary policy due to lingering inflation worries.
“Inflation is still a risk. Because of that, our monetary policy will remain the same,” he said.
On Wednesday, Indonesia reported that annual inflation in June was 7.26 percent, the highest level since December.