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)