Govt predicts budget deficit of Rp 500b this fiscal year

JAKARTA (JP): The government expects a budget deficit of Rp 500 billion (about US$58 million) for the 1998/1999 fiscal year ending on March 31, Minister of Finance Bambang Subianto said here on Thursday.

Bambang said that actual revenues were expected to be around Rp 215.1 trillion, 18.5 percent lower than budgeted, while actual spending was estimated at Rp 215.6 trillion, 18.3 percent lower than planned.

"The 1998/1999 budget which was planned to balance at Rp 263.9 trillion is expected to undergo some slight changes," he told a House of Representatives plenary session.

In order to balance the budget, which is a constitutional requirement, the government has taken loans from bilateral and multilateral institutions, including the World Bank, the Asian Development Bank and the International Monetary Fund.

Bambang, however, said that the international aid was being released slower than expected.

He said that the government had only received 51 percent of the targeted overseas development funds.

The lower amount was particularly attributed to administrative problems and difficulties, he said.

"There has also been a delay in the disbursement of the external loans," he added.

Indonesia has been slow in implementing various economic reform programs due to several factors, including the fear of corruption. This in turn has slowed the disbursement of foreign aid.

The disbursement of the social safety net fund, for example, will have to be extended until June because of the slow implementation of the multibillion dollar program, which is designed to help the poor survive the current economic crisis.

Bambang also said that the balance of payment surplus in the fiscal year was expected to reach $8.7 billion, which consists of $4.2 billion in current account surplus and $3.1 billion in capital account surplus.

He added that the remaining $1.4 billion was still being assessed. (rei)