Govt. takes more steps for business survival
The government took more steps last week to improve the prospects of businesses under threat from the effects of the global financial crisis, while the capital market improved at the end of the week in line with gains on Wall Street and regional markets.
The announcement on Saturday by the troubled Bakrie Group that it has sealed a deal with the investment group Northstar Pacific to sell its 35% stake in coal miner PT Bumi Resources for $1.3 billion was also expected to boost market sentiment.
On Tuesday, the government announced a 10-point plan that included a buy-back of government paper and on Thursday the Finance Ministry bought back Rp41 billion ($3.89 million) worth of government bonds (SUN) as part of the measures.
The ministry announced Friday that the government will also provide tax incentives valued at Rp12.5 trillion ($1.13 billion) to a range of business sectors next year to help them cope with the impact of the financial crisis.
While details remained scarce, the incentives will be aimed at reducing the costs of business for small and medium enterprises, taking the form of waived income tax and value-added tax worth up to Rp10 trillion and import duty and import tax worth Rp2.5 trillion, according to Anggito Abimanyu, the ministry's head of fiscal policy.
The waived payments will be covered by the ministry in order not to reduce the government's revenue target, The Jakarta Post reported.
Maintaining its message that the economy can withstand the external pressures, the government achieved approval of the House of Representatives budget committee for its assumptions for the economy next year, with growth targeted at 6.0%.
The assumptions include inflation at 6.2%, nearly half the present level, with October’s consumer price index figures to be released on Monday.
BI Governor Boediono said Friday that the annual inflation rate is expected to ease
from the month before, Dow Jones reported, but he did not elaborate. The September figure for on-year inflation stood at 12.14%.
A Dow Jones Newswires survey of 10 regional economists produced a median October inflation forecast of 11.83% on year.
The trade surplus was expected to have decreased moderately in September from a month earlier as machinery and equipment imports remained strong while prices of export commodities fell, according to the Dow Jones poll.
Citigroup economist Leon Hiew, who took part in the poll, said exports likely grew 27.6%, down slightly from an increase of 30.3% in August.
"We expect gradually cooling domestic demand to rein in imports and keep the trade balance at a small surplus despite the recent outpacing of import growth over export growth," he said.
The rupiah strengthened from its low for the week, a seven and a half year low of 11,800 to the dollar, to end the week at 11,000 to the greenback.
The Indonesia Stock Exchange’s composite Index rose to close the week at 1256.704, up from a 28-month low of 1,244.86 a week earlier. The rise came following steep falls earlier in the week and after the exchange introduced new regulations which brought praise from the market, raising from 10% to 20% the maximum amount a stock can gain per day.
The announcement on Saturday by the troubled Bakrie Group that it has sealed a deal with the investment group Northstar Pacific to sell its 35% stake in coal miner PT Bumi Resources for $1.3 billion was also expected to boost market sentiment.
On Tuesday, the government announced a 10-point plan that included a buy-back of government paper and on Thursday the Finance Ministry bought back Rp41 billion ($3.89 million) worth of government bonds (SUN) as part of the measures.
The ministry announced Friday that the government will also provide tax incentives valued at Rp12.5 trillion ($1.13 billion) to a range of business sectors next year to help them cope with the impact of the financial crisis.
While details remained scarce, the incentives will be aimed at reducing the costs of business for small and medium enterprises, taking the form of waived income tax and value-added tax worth up to Rp10 trillion and import duty and import tax worth Rp2.5 trillion, according to Anggito Abimanyu, the ministry's head of fiscal policy.
The waived payments will be covered by the ministry in order not to reduce the government's revenue target, The Jakarta Post reported.
Maintaining its message that the economy can withstand the external pressures, the government achieved approval of the House of Representatives budget committee for its assumptions for the economy next year, with growth targeted at 6.0%.
The assumptions include inflation at 6.2%, nearly half the present level, with October’s consumer price index figures to be released on Monday.
BI Governor Boediono said Friday that the annual inflation rate is expected to ease
from the month before, Dow Jones reported, but he did not elaborate. The September figure for on-year inflation stood at 12.14%.
A Dow Jones Newswires survey of 10 regional economists produced a median October inflation forecast of 11.83% on year.
The trade surplus was expected to have decreased moderately in September from a month earlier as machinery and equipment imports remained strong while prices of export commodities fell, according to the Dow Jones poll.
Citigroup economist Leon Hiew, who took part in the poll, said exports likely grew 27.6%, down slightly from an increase of 30.3% in August.
"We expect gradually cooling domestic demand to rein in imports and keep the trade balance at a small surplus despite the recent outpacing of import growth over export growth," he said.
The rupiah strengthened from its low for the week, a seven and a half year low of 11,800 to the dollar, to end the week at 11,000 to the greenback.
The Indonesia Stock Exchange’s composite Index rose to close the week at 1256.704, up from a 28-month low of 1,244.86 a week earlier. The rise came following steep falls earlier in the week and after the exchange introduced new regulations which brought praise from the market, raising from 10% to 20% the maximum amount a stock can gain per day.