2003 budget may be based on 4% GDP growth: Kwik<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government may base the 2003 state budget on an economic
\ngrowth rate of 4 percent, which is the same as this year's growth
\ntarget, State Minister of National Development Planning Kwik Kian
\nGie said on Thursday.<\/p>\n
Kwik did not give an explanation for the rather pessimistic
\nprojection, but said that the figure was a preliminary one.<\/p>\n
\"I think (an assumption of) 4 percent is realistic for the
\ncountry,\" Kwik said.<\/p>\n
He was speaking to the media following a Cabinet meeting that
\nfocused on preparations for the next state budget.<\/p>\n
The next meeting will be held on May 8 to finalize the various
\nmacroeconomic assumptions for the budget.<\/p>\n
Many financial institutions and analysts said that this year's
\n4 percent growth target would be hard to achieve amid the current
\nglobal economic slowdown, which puts a brake on the country's
\nexports. However, many predict that next year's economic growth
\nrate would be close to 5 percent. The UN, for instance, has
\npredicted a 4.9 percent growth rate.<\/p>\n
A 4 percent economic growth rate is seen as insufficient to
\nabsorb the huge unemployment created by the devastating 1997
\neconomic crisis.<\/p>\n
Analysts said that the country needed to return to the
\nprecrisis growth rate of 6 percent to 7 percent.<\/p>\n
As for the exchange rate assumption, he said that the currency
\nwould be hovering within the range Rp 8,750 to Rp 9,700 per U.S.
\ndollar.<\/p>\n
\"It would be good for the economy if the rupiah stabilized at
\naround 9,000 to the dollar,\" he added.<\/p>\n
The exchange rate assumption in this year's state budget is
\nset at Rp 9,000 per dollar.<\/p>\n
Given the current strengthening of the rupiah, it would not be
\ntoo difficult for the government to achieve that target.<\/p>\n
The rupiah has appreciated by more than 10 percent from the
\nlevel it was at the beginning of this year. It has been getting
\na boost lately from a slew of positive news, including the
\nsuccessful sale of government shares in Bank Central Asia (BCA),
\na rescheduling deal with the Paris Club of creditor nations over
\nthe country's sovereign debts, and approval for the disbursement
\nof the IMF $347 million loan tranche.<\/p>\n
Kwik declined to disclose the state budget deficit figure for
\nnext year, but when asked whether it would be less than 2 percent
\nof gross domestic product (GDP), he said it would be very
\ndifficult to achieve that level, given the huge cost of the bank
\nbailout program.<\/p>\n
The government issued more than Rp 600 trillion-worth of bonds
\nin the late 1990s to finance the bank bailout program. The state
\nbudget covers interest payments on the bonds. For this year
\nalone, the budget must allocate more than Rp 59 trillion to cover
\nthe interest.<\/p>\n
The state budget deficit this year is targeted at 2.5 percent
\nof GDP.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/2003-budget-may-be-based-on-4-gdp-growth-kwik-1447893297",
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