Refer to some text books, the fiscal gap measures whether current fiscal policy implies a budget that is close enough to balance to be sustainable over the long term. The fiscal gap represents the amount by which taxes would have to be raised, or spending cut, to keep the ratio of debt to GDP from rising forever. If it couldn’t be done, the debt amounts should be increased.
Therefore fiscal gap is the improvement in the fiscal balance that, if sustained in each year over the projection period, would imply a net debt to GDP ratio at the end of the period equal to its level at the beginning of the period.
The fiscal gap measures whether current fiscal policy implies a budget that is close enough to balance to be sustainable over the long term. The fiscal gap represents the amount by which taxes would have to be raised, or spending cut, to keep the ratio of debt to GDP from rising forever. If it couldn’t be done, the debt amounts should be increased.
Fiscal gap in Indonesia can be illustrated by these two presentation-slides.
indonesia in danger………!