IMF welcomes revised targets of RI's 2004 draft state budget
IMF welcomes revised targets of RI's 2004 draft state budget
Dadan Wijaksana, The Jakarta Post, Jakarta
The International Monetary Fund (IMF) supported on Friday
revisions to the 2004 draft state budget by lawmakers, saying the
new targets, including higher economic growth, were reasonable
and within expectations.
Daniel Citrin, IMF Asia Pacific senior advisor, said that the
economy would grow by around 4.8 percent next year, as agreed to
by the government and lawmakers.
"I think it's a good budget," Citrin said.
"We hope for growth at about that level because the economy is
continuing to recover, and growth prospects will be in line with
the Indonesian government's target," he added.
Citrin, who is currently in town to lead an IMF team to carry
out its final review on the country's economy, was commenting on
the deliberation results on the draft budget, which saw revisions
to most of the figures and highlighted optimism that the economy
would fare better than previously forecast.
On Thursday, the House budget commission and the government
completed their deliberations on the draft, setting a higher
growth target, lower inflation and interest rates and a smaller
budget deficit, than those proposed in August.
The deficit is set at Rp 23.02 trillion, or 1.17 percent of
the country's gross domestic product (GDP), smaller than the
government's initial proposal of Rp 24.9 trillion, or 1.2 percent
of GDP.
Total expenditure is set at Rp 373.3 trillion (US$44.18
billion), up from the initial proposal of Rp 368.79 trillion,
with revenue estimated at Rp 349.9 trillion against Rp 343.87
trillion previously.
Other final targets include 4.8 percent GDP growth, against
4.5 percent stated in the draft; inflation of 6.5 percent
(previously 7.0 percent); an average rupiah exchange rate of
8,600 to the dollar (Rp 8,700) and a three-month Bank Indonesia
interest rate of 8.5 percent (9.0 percent). The oil price was
earmarked at $22 per barrel ($21 per barrel) with oil production
of 1.15 million barrels per day.
During Thursday's hearing, it was revealed that the optimism
was based on an assumption that the global economy would continue
to improve, which is expected to help boost investment and
exports, coupled with continued strong consumption at home due in
part to estimated high levels of spending during the political
campaigns in the run-up to the general elections.
Citrin's positive note should provide the government with more
confidence in meeting those targets.
Minister of Finance Boediono stressed that if the government
worked harder while the economy was also free from shocks, the
economy next year could grow even more.
If the country could secure smooth elections, investor
confidence in the country would then rise accordingly, Boediono
said.
For this year, the state budget has targeted the economy to
grow by 4 percent.
2004 Economic Growth Forecasts
2003 2004
World Bank 3.5% 4.0%
ADB 3.4% 4.0%
StanChart 3.8% 4.3%
Mandiri 3.9% 4.2%
State Budget 4.0% 4.8%
Source: The Jakarta Post file