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Indonesia
proposes 2005 state budget deficit at 0.7-0.9 pct of GDP
The government and legislators today started discussions on the 2005 draft
state budget, with the government proposing a state budget deficit of
between 0.7-0.9 pct of gross domestic product (GDP) for the year,
according to prepared documents
and witnesses.
The deficit level has been proposed by Finance Minister Boediono in a
document prepared for the meeting with the House of Representatives'
budget committee.
Earlier this month, the government said it targets GDP growth of 5.0-5.5
pct for 2005, against an estimated 4.8 pct this year.
Other 2005 budget assumptions include an inflation rate of between 5.0-6.0
pct against 6.5 pct this year, and an average three-month Bank Indonesia
Certificate (SBI) rate of 6.5-7.5 pct.
Previously the government pegged the 2005 inflation assumption at 5.5 pct
and an average three-month SBI rate at 7 pct.
It also changed the 2005 assumed world crude oil price to 22-25 USD per
barrel from 21-24 USD previously. The assumed oil output for the next year
has been maintained at 1.1 mln barrels per day.
The rupiah is seen averaging between 8,400-8,700 against the dollar,
against 8,600 this year.
Last week, Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti
said the budget discussions will center on five issues: the amount of the
state budget deficit; the amount of subsidy spending; the budget for
active and retired civil servants as well as military and police
personnel; and the privatization of the education sector and its budget.
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