Govt says deficit under control

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.