Govt seeking foreign loans to cover state budget deficit: Bappenas

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Sat, 02/23/2008 4:44 PM

The government plans to acquire more foreign loans to help cover the state budget deficit, which is set to swell this year amid a slowing global economy and still-high world crude oil prices.

To cover the deficit, the government is seeking Rp 4.7 trillion (US$513.1 million) in new loans, the deputy chief for development budget at the National Development Planning Agency (Bappenas) Lukita Dinarsyah Tuwo told a Friday discussion.

The government has already borrowed Rp 19.1 trillion from the World Bank, the Asian Development Bank (ADB) and Japan-based bank JBIG, meaning this year's foreign loans could reach Rp 23.8 trillion, Lukita said.

The money will be lent through a Development Policy Loan (DPL), an Infrastructure Development Policy Loan (IDPL), local government financial regulations (LGFR) and a climate change policy loan.

Lukita said the DPL would be financed by the World Bank and co-financed by the ADB and JBIG, the IDPL financed by the ADB and co-financed by the World Bank and JBIG and the LGFR financed by the ADB. The climate change policy loan is currently under discussion.

The government revised its 2008 state budget at the end of last month, citing the weakening global economy and the rise of oil prices.

Usually the government revises the state budget after the end of the first semester of a fiscal year.

The revised budget deficit was increased from 1.7 percent to 2 percent, or Rp 87.3 trillion, of the predicted GDP.

The country's economy is estimated to grow by 6.4 percent this year, down from the earlier estimate of 6.8 percent.

Global oil prices on Wednesday closed at a record high of $101.32 per barrel.

Lukita also said Bappenas was optimistic the country's poverty rate would not increase, although consumption -- the nation's main economic engine -- might decrease.

"The government is prepared to continue measures to keep the poverty rate at between 14 percent and 15 percent this year, such as providing cheap rice for poor people," said Lukita.

The government has also eliminated the import duty on soybeans and the value-added tax on flour, wheat and cooking oil. The four are among the country's key basic commodities.

A  |   A  |   A  |    |   |    |    |    |  

Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.