Current state budget enjoying $2.2b surplus
JAKARTA (JP): The implementation of the current 1998/1999 state budget had resulted in a surplus of Rp 16.39 trillion (US$2.2 billion) as of Nov. 14, 1998, according to an official report.
The report by Finance Minister Bambang Subianto to a monthly cabinet meeting on economic matters on Wednesday revealed that the government had collected Rp 128.776 trillion in revenue, or 48.8 percent of the target set in the current budget.
Meanwhile, government spending totaled Rp 112.38 trillion, or 42.6 percent of the target set in the budget which ends in March 1999.
"As of November 1998, our state budget was positive. The amount of state income exceeded expenditure, resulting in a budget surplus of Rp 16.39 trillion," the report said.
On the income side, revenues from oil and gas totaled Rp 27.57 trillion, or 55.5 percent of the budget target; while non-oil income reached Rp 68.94 trillion, or 69.2 percent of the target.
Meanwhile, the disbursement of foreign aid was quite slow, giving the government Rp 32.26 trillion in funds, or 28.2 percent of the target set by the budget.
These disbursed foreign borrowings consisted of Rp 16.92 trillion in quickly-disbursed program loans and Rp 15.34 trillion in project-related loans.
On the other side, routine expenditure reached Rp 84.24 trillion, or 49.2 percent of total envisaged in the current budget.
Meanwhile, development (investment) spending accounted for only 30.4 percent of the budget, or Rp 28.14 trillion, of which Rp 12.8 trillion was financed by rupiah-denominated funds and the remaining Rp 15.34 trillion by foreign project-related loans.
The rupiah-denominated spending included Rp 4.47 trillion for social safety nets and Rp 2.8 trillion for bank restructuring.
Disbursement of funds for social safety nets was relatively slow in the first semester of the current budget, reaching only 16 percent of the budget, but it was on the rise in the last two months.
State Minister of National Development Planning Boediono revealed that about 25 percent of the planned spending for the net programs had been disbursed as of Nov. 14.
He expressed optimism that despite a late start the disbursement of funds for the social safety nets would meet the current budget year's target.
The finance minister's report projected that the current budget would see some changes both in revenues and spending due to changes in some of assumptions.
The rupiah's exchange rate against the U.S. dollar, for instance, is now projected to average Rp 9,514 per dollar for the current budget, compared to the original estimate of Rp 10,600.
The stronger rupiah would affect both income and expenditure. On the income side, it would reduce -- in rupiah terms -- the value of foreign borrowing.
The realization of quickly-disbursed loans would reach only Rp 37.96 trillion, or 51.3 percent of the target set, while that of project-related foreign loans would be Rp 27.81 trillion, or 68.6 percent of the budget.
Expenditure-wise, the strengthening rupiah would reduce government costs for foreign debt servicing by Rp 7.57 trillion, fuel subsidies by Rp 3.7 trillion and other subsidies by Rp 7.79 trillion.
Another important change was crude oil prices, which are now projected to average $12.3 per barrel, compared to the original estimate of $13.
Income from the oil and gas sector would reach Rp 43.35 trillion, or 87.2 percent of the budget target.
Both Bambang and Boediono, however, remained confident that the falling crude oil prices on the international market now would not affect the budget significantly and therefore, it was not necessary for the government to revise it again.
"Our budget is safe so far despite the low oil prices. But we are remaining cautious," Bambang said.
Boediono added: "Our cash flow is good, so there is no need to revise the budget."
Bambang noted that the falling revenues from oil and gas would be complemented by increasing tax and excise revenues, which were expected to reach Rp 89.47 trillion, or 122.7 percent of the target. (prb/rid)