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Govt revises down economic growth forecast for 2009
The Jakarta Post , Jakarta | Mon, 10/13/2008 1:10 PM | Business
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 Indonesia benchmark lending rates from 8 percent per annum up to 8.5 percent for next year.
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 Middle East.
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)
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WongSemPilan (not verified) — Tue, 10/14/2008 - 8:09am
Based on the article above, I catch that our govt is panic in facing the financial crisis in America, ready or not, the effect of the global financial crisis will come to our country sooner or later. But I believe that we have several indicators which lead our country to the second bankruptcy. 1. Our country will hold the general election, I'm afraid if our govt will not issue the fair policy since the competition to win the General Election is quite tight. 2. The old effect of the first monetary crisis, we still have been getting the effects, from year to year more people are becoming poor. 3. Budgetary Leakage, Public has known that the leakage on the APBN until 30%-40%. 4. We have sold all our assets.