Govt's growth target ambitious: Sri Mulyani

Govt's growth target ambitious: Sri Mulyani

Dadan Wijaksana, The Jakarta Post, Jakarta

While the overall targets in the newly approved 2004 state
budget appear to be achievable, the 4.8 percent economic growth
target should pose a tougher challenge, said an expert.

Prominent economist Sri Mulyani, International Monetary Fund
(IMF) executive director for Southeast Asia, called the growth
target "ambitious" on Tuesday.

"...Next year, the state budget is faced with the task to
reduce the deficit, while it is also burdened with achieving a
high level of growth and making huge debt payments," Sri told
reporters after a meeting with the House of Representatives
budget commission.

The 2004 budget, which marks the first fiscal year without the
IMF special lending program, contains optimistic targets set out
by the government and the House, with a lower deficit and higher
economic growth.

The targets were approved despite the huge foreign debt
payments resulting from the absence of the debt rescheduling
facility from the Paris Club of creditor nations. Indonesia will
no longer eligible for this facility once the IMF program
terminates at the end of the year.

The government said its optimism was based on the assumption
that the global economy would continue to improve, coupled with
continued strong consumption at home.

Improvement in the world economy, especially major economies
such as the U.S., Japan, Singapore and China, would provide a
positive impact on the performance of the country's investments
and exports. This, combined with progress on the domestic
consumption front -- very likely in 2004 spurred by the expected
huge spending for political campaigns -- the government believes
it has set challenging, but attainable, budget targets.

The deficit is set at Rp 24.4 trillion, or 1.2 percent of the
country's gross domestic product, lower than this year's 1.9
percent. Last year, the state budget booked a deficit of 2.5
percent.

Sri welcomed the gradual decline in deficit, as it would in
turn limit the government's need to seek more loans from
international creditors.

While expressing confidence in the government's ability to
meet the targets, she cautiously added whether the government
could maintain its discipline in meeting a lower deficit and
higher growth simultaneously.