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State budget deficit may increase to 2.60 percent: Minister
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Bank Indonesia Governor Agus Martowardojo (left), Finance Minister Sri Mulyani Indrawati (standing) and National Development Planning Minister Bambang Brodjonegoro attend a meeting on macroeconomic assumption with members of the House of Representatives’ Commission XI overseing financial affairs in Jakarta on June 13. (Antara/ M Agung Rajasa)
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inance Minister Sri Mulyani Indrawati has said the state budget deficit may increase to 2.60 percent, up from the initial target of 2.41 percent because of changes in both spending and revenue.
Sri Mulyani said she would report to the House of Representatives about the increased deficit projection and promised to maintain the deficit to below 3 percent.
She said, as reported by tempo.co, the increase in the state budget deficit was caused, in particular, by the increase in urgent expenditure. She cited spending in two main sectors – education and health – that could not be delayed.
To contain the deficit, the government would seek to increase revenue from taxation as well improve efficiency in spending.
“With the careful control of spending and by considering revenue sources, we hope to curb the budget deficit,” she said.
She also stressed that the ministry would avoid sourcing funds from loans to finance basic expenditure.
“If loans are necessary, the capital must be used for productive activities so we can repay the debt,” she added.
She admitted the government debt had increased by 4.92 trillion (US$367 million) since April to Rp 3.67 quadrillion in May.
But she stressed that the condition of Indonesian debt was still safe because it was still below 30 percent of the country's gross domestic product (GDP). (bbn)
