House approves budget revision

House approves budget revision

The Jakarta Post, Jakarta

The House of Representatives budget commission has approved
the 2001 revised state budget which sees a slightly wider
deficit.

The government proposed the revision earlier this week, one
month before the budget year ends on Dec. 31, due to the
weakening rupiah, higher inflation and rising interest rates.

The deficit widened slightly to Rp 54.7 trillion (about
US$5.26 billion) from the planned Rp 54.3 trillion, but finance
minister Boediono said that it was still within the safe level of
around 3.7 percent of gross domestic product (GDP), as previously
targeted.

Certain macroeconomic assumptions in the state budget had been
off-target.

The rupiah exchange rate is expected to average at Rp 10,219
per U.S. dollar against the budget assumption of Rp 9,600; the
full year inflation rate is expected to reach 11.9 percent
against the 9.3 percent assumption; and the average interest rate
of Bank Indonesia's three-month SBI promissory notes was 16.4
percent compared to the assumption of 15 percent.

But the government is optimistic that the full year economic
growth target of 3.5 percent would still be achieved.

Under the revised budget, revenue is expected to be higher at
Rp 299.9 trillion, up from an initial figure of Rp 286 trillion,
while expenditure would increase to Rp 354.6 trillion from Rp
340.3 trillion.