Posted on 14 Oct 2008
Amid the global financial crisis, Finance Minister Sri Mulyani Indrawati presented a revision to the assumptions of the 2009 state budget to the House of Representatives on Monday, with lower economic growth forecasts.
"With the current dynamic movement of the world economy, we consider it necessary to adjust the macroeconomic assumptions of our 2009 budget to make them more credible and realistic," Sri Mulyani told the House's budget committee.
Sri Mulyani said the government had revised the economic growth forecast for next year from 6.3 percent down to between 5.5 percent and 6.1 percent, while the rupiah's average exchange rate against the dollar has been adjusted up to Rp 9,500 from Rp 9,100 per dollar, and similarly, year-on-year inflation has been revised from 6.2 percent up to 7 percent.
In addition, the minister said the government had revised its forecast for Indonesian crude oil prices down to US$85 per barrel from $95.
The government also revised its target for Bank
The minister also disclosed that the government would reduce the issuance of government bonds and would seek other sources of financing to plug the budget deficit, including from bilateral and multilateral donors.
Nevertheless, the government still plans to issue Islamic bonds next year in order to tap financial resources from the
The minister also promised to keep 2009 priority programs intact, especially poverty reduction and infrastructure development, and would maintain the ratio of education spending at 20 percent of the total budget.
Sri Mulyani also said that if the government and the House did not make adjustments to the assumptions, the 2009 budget would be in danger of having a deficit of Rp 53.9 trillion (US$5.4 billion). (rid)
