Govt says deficit under control

The Jakarta Post, Jakarta

The government is on track to contain the 2002 state budget deficit within the targeted limit, according to Minister of Finance Boediono.

He was quoted by detik.com as saying on Monday that although revenue from value-added tax (VAT) was lower than projected, the government managed to obtain higher income tax from the oil and gas sector.

He did not elaborate.

The state budget deficit for this year is set at 2.5 percent of gross domestic product. Maintaining the budget deficit within a safe level is the key to achieving macroeconomic stability.

Some analysts said earlier that the revenue from VAT could be lower than targeted because of a slowdown in business transactions amid the current economic difficulties.

But the oil and gas sector has benefited from the current rise in the price of the commodity amid worries of a U.S.-led attack on Iraq, a major oil producing country.

Separately, Anggito Abimanyu, a specialist adviser at the ministry, said that the government was hopeful the economy could grow by 4 percent this year, as targeted in the state budget, despite reports of falling investment activities and weak export performance.

Anggito said government spending and domestic consumption in the fourth quarter of this year were expected to push economic growth to the projected level.

On inflation, he said that single-digit inflation could be achieved if inflation in December could be contained below 2 percent.

There has been growing doubt that the single-digit inflation target can be met as prices of many goods and services normally increase in December amid the year-end festivities.