Downside risk greater: Finance minister
The Indonesian economy is facing a "bigger, greater" downside risk from rising commodities prices, Finance Minister Sri Mulayni Indrawati told Dow Jones Newswires on Saturday (9/2/08).
She said a budget revision to be submitted to the House of Representatives is “to maintain the
growth...which is very challenging under the current environment," she said on the sidelines of the Group of Seven industrial countries in Tokyo, where Indonesia is an observer.
Under the revised budget, the government is lowering its 2008 gross domestic product forecast to 6.5% from 6.8%, Mulyani said.
While the government still expects inflation to grow between 4% and 6%, it will likely increase by as much as 6.5% "in the worst case scenario," she added.
"We are controlling the volume, not the price" of fuel products in order to reduce the burden of the government's fuel subsidies on its budget, said Mulyani, referring to a decision to limit access to subsidized fuels.
The government has also unveiled a Rp13 trillion package to stabilize food prices, she said.
Earlier, Mulyani was quoted by Antara as saying that the latest forecast on the country's macroeconomic fundamentals showed mounting inflationary pressure as domestic consumption continued to suffer from global price increases.
Last month, the country's inflation rate reached to a 16-month high, with a 1.77% increase, due to the price rises for key commodities, such as rice, wheat and soybeans.
Growing inflation forced Bank Indonesia to keep its rates unchanged at 8% at its latest monthly policy meeting on Wednesday.
The government will apply restrictions on the purchase of subsidized fuel starting from May, Kompas reported.
Downstream Oil and Gas Regulatory Agency (BPH Migas) committee member Adi Subagyo said the government will first apply the new regulations in Jakarta, Bogor, Depok, Tangerang and Bekasi.
Through the program, the government is expecting to save up to Rp8 trillion per year. It is considering a number of options, including whether to apply the restrictions to all vehicles or only to those with engines over 2,000 cc.
The government said it will keep studying and improving the use of a smart card system for subsidized kerosene supplies. The government expects to save up to Rp3 trillion per year through the kerosene program.
Asian Development Bank President Haruhiko Kuroda said on Saturday that growth prospects in Asia's emerging economies remains favorable, although the outlook for the developed countries is a concern.
A draft statement circulating at the Tokyo G-7 meeting stated Saturday that the US economy may slow further and erode global growth, while stopping short of proposing specific measures in response, Bloomberg reported.
She said a budget revision to be submitted to the House of Representatives is “to maintain the
growth...which is very challenging under the current environment," she said on the sidelines of the Group of Seven industrial countries in Tokyo, where Indonesia is an observer.
Under the revised budget, the government is lowering its 2008 gross domestic product forecast to 6.5% from 6.8%, Mulyani said.
While the government still expects inflation to grow between 4% and 6%, it will likely increase by as much as 6.5% "in the worst case scenario," she added.
"We are controlling the volume, not the price" of fuel products in order to reduce the burden of the government's fuel subsidies on its budget, said Mulyani, referring to a decision to limit access to subsidized fuels.
The government has also unveiled a Rp13 trillion package to stabilize food prices, she said.
Earlier, Mulyani was quoted by Antara as saying that the latest forecast on the country's macroeconomic fundamentals showed mounting inflationary pressure as domestic consumption continued to suffer from global price increases.
Last month, the country's inflation rate reached to a 16-month high, with a 1.77% increase, due to the price rises for key commodities, such as rice, wheat and soybeans.
Growing inflation forced Bank Indonesia to keep its rates unchanged at 8% at its latest monthly policy meeting on Wednesday.
The government will apply restrictions on the purchase of subsidized fuel starting from May, Kompas reported.
Downstream Oil and Gas Regulatory Agency (BPH Migas) committee member Adi Subagyo said the government will first apply the new regulations in Jakarta, Bogor, Depok, Tangerang and Bekasi.
Through the program, the government is expecting to save up to Rp8 trillion per year. It is considering a number of options, including whether to apply the restrictions to all vehicles or only to those with engines over 2,000 cc.
The government said it will keep studying and improving the use of a smart card system for subsidized kerosene supplies. The government expects to save up to Rp3 trillion per year through the kerosene program.
Asian Development Bank President Haruhiko Kuroda said on Saturday that growth prospects in Asia's emerging economies remains favorable, although the outlook for the developed countries is a concern.
A draft statement circulating at the Tokyo G-7 meeting stated Saturday that the US economy may slow further and erode global growth, while stopping short of proposing specific measures in response, Bloomberg reported.