Govt to adopt calendar year budget planning

Govt to adopt calendar year budget planning

JAKARTA (JP): Coordinating Minister for Economy, Finance and
Industry Kwik Kian Gie said here on Saturday that the government
has decided to start the next state budget based on the calendar
year rather than the fiscal year used in the previous budget.

Kwik said that the first calendar year budget will only be a
nine-month budget because it would start in April and end in
December.

The current 1999/2000 fiscal year state budget ends on March
31, 2000.

"The budget in 2000 will start from April 1 until December
31," he said following a ceremony at the State Palace.

The government has been considering using the calendar-year
budget in a bid to simplify administration and government
planning.

The government wanted to reduce foreign borrowings in the next
budget, he said, adding that the size of the reduction in foreign
borrowing was still being calculated.

Kwik also said that the government and the International
Monetary Fund technical team were still discussing the various
assumptions to be used in the next state budget.

He said that oil prices assumption may be put at between US$20
per barrel and $22 per barrel, as compared to $17 per in the
current budget.

World crude oil prices have increased above the $17 level to
over $20 per barrel in the last few months, making state revenues
from oil and gas exports higher than the initial estimate.

He also said that inflation might be assumed at between 4
percent and 5 percent.

Indonesia suffered a hyperinflation of more than 77 percent
last year when the economic crisis, which started to hit the
country in August, 1997, deepened.

But the government has managed to control inflation to low
levels, and the full-year inflation level is estimated to be 0.12
percent, according to the Central Bureau of Statistics.

Inflation is seen to increase as the economy continues to grow
next year, and as the government may readjust subsidized
commodities, including fuel.

Kwik also said that the government has agreed to abolish
subsidies but that it would only be done "gradually".

Kwik said the government must find ways so that the removal of
the subsidy would only affect wealthier people, not poor people.

"It must not be across the board," he said.(rei/prb)