Govt records low deficit in first half
Govt records low deficit in first half
The Jakarta Post, Jakarta
The government has said it posted a budget deficit of Rp 2.5
trillion (US$304.87 million) in the first half of the year, well
below the full-year deficit target of Rp 34.4 trillion, thanks
primarily to improving macroeconomic indicators.
The deficit in the first six months of the year accounted for
about 7.3 percent of the Rp 34.4 trillion target, said a media
release on Thursday from the Ministry of Finance. The Rp 34.4
trillion deficit was equal to around 1.8 percent of the country's
gross domestic product (GDP).
A stronger exchange rate of the rupiah against the U.S. dollar
and declining Bank Indonesia benchmark interest rate have helped
cut spending, particularly on foreign and domestic debt
repayments.
The release said that the rupiah had strengthened to an
average rate of Rp 8,693 per U.S. dollar during the first
semester, less than the state budget assumption of Rp 9,000 per
dollar.
Inflation has also eased, mainly because of the stronger
rupiah, which made imported goods cheaper. In the January through
June period, the cumulative inflation level was 1.23 percent, way
below a full-year forecast of 9 percent.
Solid development in the rupiah and weak inflation have
allowed the central bank to retain its aggressive stance in
cutting its benchmark interest rate.
During the first six months of the year, the interest rate has
averaged 11.65 percent, around 1.35 percentage points short of
the state budget target.
These factors have helped keep the government's expenditure
manageable, with around Rp 139.7 trillion spent from January
through June, 37.7 percent of the total allocation for the whole
year.
On the revenue side, the budget gained Rp 137.2 trillion as of
June, or around 40 percent of the total 2003 revenue target.
Target & Realization of 2003 Budget
----------------------------------------------------------
Full-year GDP H1
Target
(Rp) (%) (realization)
----------------------------------------------------------
* State revenue: 336.6 t 17.3 137.2 t
* State expenditure: 370.6 t 19.0 139.7 t
- Routine : 188.9 t 9.7 71.0 t
- Development: 65.1 t 3.4 14.2 t
- Regional: 116.9 t 5.9 54.5 t
* Budget deficit: 34.4 t 1.8 2.5 t
* Domestic finance: 22.5 t 1.2 1.6 t
* Foreign finance: 12.0 t 0.6 0.8 t
----------------------------------------------------------
Source: Ministry of Finance