Government proposes optimistic 2005 draft budget<\/p>\n
Dadan Wijaksana, Jakarta<\/p>\n
The government proposed a draft law on the 2005 state budget
\nto the House of Representatives on Tuesday, outlining higher
\neconomic growth and lower deficit targets.<\/p>\n
Minister of Finance Boediono told legislators on the House's
\nbudget commission that strong domestic consumption coupled with
\nan increase in exports and investment would accelerate economic
\ngrowth to between 5 percent and 5.5 percent next year.<\/p>\n
The economy is expected to grow by 4.8 percent this year.<\/p>\n
\"We expect a bigger contribution from exports and investment
\nnext year, to ensure more sustainable growth,\" Boediono told the
\ncommission, adding that the assumption was realistic provided
\nthere was continuity in the current pace of global economic
\nrecovery.<\/p>\n
Boediono was accompanied by State Minister of National
\nDevelopment Planning Kwik Kian Gie and Bank Indonesia senior
\ndeputy governor Anwar Nasution.<\/p>\n
Both Boediono and Kwik acknowledged that such a growth would
\nbe insufficient in significantly reducing the chronic problems of
\npoverty and unemployment, but said the target was the most
\nrealistic the government could come up with given current
\nconditions.<\/p>\n
Indonesia has around 2.5 million new workers entering the job
\nmarket each year, meaning that its economy has to expand by at
\nleast 6 percent to be able to absorb the majority of them.<\/p>\n
Analysts have said that only the return of foreign investment
\ncould stimulate the economy to be that dynamic -- a tough task
\nconsidering the lack of confidence on the part of investors
\ntoward Indonesia.<\/p>\n
The latest data show that in the first quarter of the year,
\napprovals for foreign direct investment (FDI) fell by 41 percent
\nto US$1.5 billion from $2.6 billion in the same period of last
\nyear.<\/p>\n
Under the draft, the government also set the deficit target at
\nbetween 0.7 percent and 0.9 percent of gross domestic product
\n(GDP), lower than the 1.2 percent estimate for 2004 and the 1.7
\npercent reached last year.<\/p>\n
A number of financing sources have been earmarked to finance
\nthe gap, including from the government's investment funds (RDI),
\nthe sales of assets under the Asset Management Company (PPA) and
\nprivatization, bonds issues and selective foreign loans.<\/p>\n
Elsewhere, both Boediono and Kwik stressed that the proposed
\ndraft should serve only as a \"baseline budget\", which intended to
\nensure fiscal sustainability as well as provide enough space for
\nthe next government and lawmakers to make adjustments.<\/p>\n
\"The government and lawmakers emerging from the elections
\ncould make adjustments on this draft. But we need to proceed with
\nthis to avoid a vacuum for the government,\" Boediono said.<\/p>\n
Indicator 2004 Target Estimate Realization 2005 Draft<\/p>\n
Growth (%) 4.8 4.8 5.5-5.5<\/p>\n
Inflation (%) 6.5 5.5 5.0-6.0<\/p>\n
Foreign Exc. (Rp\/US$) 8,600 8,500 8,400-8,600<\/p>\n
Oil price (US$\/brl) 22.0 24.5 22-25<\/p>\n
Oil output (mbpd) 1.15 1.05 1.1<\/p>\n
Source: Government data<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/government-proposes-optimistic-2005-draft-budget-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }