Govt. expects budget deficit to narrow to 1 percent

The Jakarta Post ,  Jakarta   |  Wed, 10/15/2008 5:04 PM  |  National

The government has reduced the expected budget deficit for 2009 to 1 percent of gross domestic product, down from the previous forecast of 1.3 percent, said a lawmaker involved in budget formulation in Jakarta on Wednesday.

"The deficit proportion has been set at 1 percent, but there is still the option to lower it if the government can reduce spending," said Suharso Monoarfa, vice chair of a budget committee in the House of Representatives.

The government is expected to reduce exposure on government bonds due to unfavorable market conditions amid the growing global liquidity crisis and to reduce expenditure on government offices and ministers.

The government fuel subsidy is also expected to slim as weakening global demand for oil should bring down the price of crude oil from its July peak.

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