The Jakarta Globe, Muhammad Al Azhari, February 13, 2009
The government on Thursday downwardly revised its economic growth targets in the 2009 state budget to reflect the impact of the global economic slowdown and sought speedy approval for the revision from the House of Representatives.
“The global crisis has developed quickly and the impact is deep, so every country needs to respond to anticipate it,” Finance Minister Sri Mulyani Indrawati told a House budgetary commission hearing.
The Finance Ministry now projects 2009 growth of 4.2 percent to 4.7 percent, down from the 6 percent in the budget approved by the House last year, said Anggito Abimanyu, the ministry’s head of fiscal policy.
“The change in economic indicators in the form of lower economic growth, the rupiah exchange rate and oil prices carries an impact on the 2009 budget,” Sri Mulyani said.
The finance minister said that in anticipation of the effects of the global crisis being felt at home, steps needed to be taken, “including adjusting the state budget and the addition of fiscal stimulus.”
Paskah Suzetta, the planning minister, said that under the State Budget Law, the House has until Tuesday to decide whether to approve the revisions.
In the proposed revised budget, the average exchange rate for 2009 has been raised to Rp 11,000 a dollar, up from the original Rp 9,400. The estimate for global crude oil prices is now $45 a barrel, down from the earlier projection of $80.
State revenue was originally projected in the budget to reach Rp 985.7 trillion ($83.78 billion), but the revised projection put it at Rp 853 trillion. The Rp 132 trillion shortfall was largely because of expected lower revenues from the oil and gas sector and taxes.
Tax revenue was forecast to miss the original target, falling by 8.11 percent to Rp 666.9 trillion, while oil and gas sector revenue was likely to slide to Rp 92 trillion from Rp 162.1 trillion earlier following the dive in global crude oil prices.
The budget deficit was also predicted to soar by Rp 78 trillion to Rp 129.5 trillion, equivalent to 2.5 percent of the gross domestic product. The deficit in the original state budget was predicted at 1 percent of GDP – equivalent to Rp 51.3 trillion.
The huge difference is accounted for by the government’s planned Rp 71.3 trillion fiscal stimulus package.
The budget commission concurred that the situation called for action, but had reservations.
“We won’t be obstructing the government, should it need an additional deficit, especially if it wants to use the surplus financing,” said Emir Moeis, the chairman of the commission.
But he said the government should submit a more detailed breakdown of the revisions for the commission to study.
A special provision in the 2009 budget law allows emergency adjustments to the budget without having to secure the approval of a plenary meeting, a process that would usually take weeks if not months. The government intended to invoke the clause because it deemed urgent action would be needed to safeguard the overall economy.
Related Articles:
Ailing U.S. banks may require more aid to stay solvent: report
HSBC sees Asia recovering first from global slump
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.