2006 budget sets sights on 6.5% GDP growth, 0.7% deficit
2006 budget sets sights on 6.5% GDP growth, 0.7% deficit
Urip Hudiono, The Jakarta Post/Jakarta
The House of Representatives's Budget Commission has agreed on
the assumptions to be used in next year's budget.
The assumptions include economic growth of up to 6.5 percent
and a budget deficit of 0.7 percent of gross domestic product
(GDP).
In a hearing late on Thursday with Minister of Finance Jusuf
Anwar, State Minister for National Development Planning Sri
Mulyani Indrawati and Bank Indonesia (BI) deputy governor Hartadi
A. Sarwono, the commission also agreed on an inflation rate
assumption of between 4.5 percent and 6.5 percent for next year
and a rupiah range of between Rp 9,000 and Rp 9,400 to the U.S.
dollar.
The country's oil production, meanwhile, is expected to reach
between 1.075 and 1.125 million barrels per day (mbpd), with the
oil price assumption being in a range of between $40 and $45 a
barrel.
Legislator Amin Said Husni, who heads the commission's
macroeconomic assumptions deliberation team, said the higher GDP
growth between 6 percent and 6.5 percent -- as compared to the
government's 5.5 percent to 6.5 percent proposal -- was based on
the consideration that Indonesia's economy would benefit from
expected increasing global trade and growth next year.
"The country's political and economic stability, as well as
higher exports and investment on the back of improved
infrastructure and a better investment climate, will also
contribute to the growth," he said.
The commission has requested that the government continue
maintain its current fiscal policy in next year's budget,
including its plan to decrease the deficit to 0.7 percent of GDP
and the country's debt ratio to between 41.3 percent and 43.3
percent of GDP.
The 2005 budget envisages the deficit at 0.8 percent of GDP
and the debt ratio at 47.5 percent.
"The commission has also given the green light to the
government to maintain its fuel subsidy policy as it is, and seek
additional revenues of Rp 12.5 trillion from the profits earned
by state-owned enterprises, and another Rp 3.5 trillion from
privatizations," Said explained.
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2006 State Budget macroeconomic assumptions:
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2005 Govt Commission
budget proposal approval
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GDP growth (%) 6.0 5.5-6.5 6.0-6.5
Inflation (%) 7.5 4.5-6.5 6.5-8.0
Exchange rate (Rp/US$) 9,300 8,800-9,200 9,000-9,400
SBI rate (%) 8.0 6.5-8.5 7.0-8.5
Oil price (US$/barrel) 45 40-45 40-45
Oil production (mbpd) 1.125 1.075 1.075-1.125
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Source: Budget Commission
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