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Boediono warns about raising budget deficit threshold
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Guardians of the economy: Bank Indonesia Governor Agus Martowardojo sits next to former vice president Boediono during a seminar at the annual Executives' Meeting of Asia Pacific Central Banks (EMEAP) in Bali on August 1. (Courtesy of Bank Indonesia/-)
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ormer vice president Boediono has called on the government to proceed with caution should it go ahead with considerations to allow for a greater state budget deficit in response to the currently weak global economy.
“If there is a discourse [on raising the threshold], I would say that [the government] must be careful,” Boediono, who served as vice president between 2009 and 2014 alongside then-president Susilo Bambang Yudhoyono, said on Wednesday at a public forum in Jakarta, as quoted by new agency Antara.
“It is possible that we return to an era when the state budget was a subject of conflict and got out of control,” he warned.
Amid widening estimates of the state budget deficit throughout the year, economists have highlighted the importance of raising the legal threshold for the deficit — currently at 3 percent of the gross domestic product — so that the government can continue to work on many projects without having to cut spending when revenue collection is sluggish.
The government, however, has maintained confidence that raising the threshold would not be needed anytime soon.
In mid-September, Finance Minister Sri Mulyani Indrawati increased the nation’s fiscal deficit target to 2.7 percent by year-end, due to a greater-than-expected shortfall in revenue. (hwa)
