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Budget deficit estimated at 2.4 pct at year end: Finance minister

5th July 2012 | 2.195 Views
Budget deficit estimated at 2.4 pct at year end: Finance minister
Finance Minister Agus Martowardojo (FOTO ANTARA/Dhoni Setiawaned)
Jakarta (ANTARA News) - Finance Minister Agus Martowardojo is predicting budget deficit would reach around 2.4 percent by the end of the year due to several changes in macro-economic assumptions in the 2012 revised budget.

"With the changes in the price of oil, oil lifting, exchange rate and other macro-economic assumptions we believed our deficit would be between 2.3 and 2.4 percent," he said here on Thursday.

He said the deficit range was still healthy although it did not meet the target set at 2.23 percent.

"The figure also reflects good conditions. What I mean is if we make bigger efforts it could still be reduced," he said.

Until the first semester the implementation of the 2012 revised budget has recorded a deficit of Rp36.1 trillion or 19 percent of the government`s projection at Rp190.1 trillion.

He said the deficit occurred because realization of state revenues only reached Rp593.3 trillion or 43.7 percent of the target at Rp1,358.2 trillion while spending had totaled Rp629.4 trillion or 40.7 percent of the ceiling at Rp1,548.3 trillion.

Agus said to secure the implementation of the revised budget against increased deficit the government would conduct a carry-over on electricity subsidy, saving employee expenditures and debt interest payments.

"We will always monitor the budget to assure it remains healthy and credible," he said.

He said the step needs to be taken because based on the outlook of the 2012 revised budget the deficit is estimated to reach Rp190.8 trillion or 2.3 percent of the GDP or higher than the 2.33 percent target.

State expenditures and revenues are estimated to be above the target and ceiling due to expectation that the Indonesian Crude Price (ICP) would be higher that the assumption at US$105 per barrel and the rupiah exchange rate would be at Rp9,000 against the US dollar.

The ICP at present is at around US$117.3 per barrel while the rupiah exchange rate at Rp9,203 against the greenback.

Minister Agus hoped the deficit could be covered by domestic funding totaling Rp199.9 trillion and overseas funding (net) negative at Rp9.1 trillion.(*)