The 2.02 percent state budget deficit was larger than the deficit projected in the draft 2014 state budget, which stood at Rp154.2 trillion, or about 1.49 percent of the GDP, Finance Minister Chatib Basri said.
Jakarta (ANTARA News) - The 2014 budget deficit is estimated to reach Rp209.5 trillion, or about 2.02 percent of the gross domestic product (GDP), due to an increase in state expenditures, a cabinet minister said.

"This figure comes out as a consequence of the change in the macro economic assumption. This figure also shows that the government is lacking in best efforts," Finance Minister Chatib Basri told a working meeting with the House of Representatives` Budgetary Body here on Monday.

Those at the hearing discussed the change in the basic assumptions of the macro economy and the draft 2014 budget. The meeting was also attended by National Development Planning Minister Armida Alisjahbana and Deputy Minister for Energy and Mineral Resources Susilo Siswoutomo.

Minister Chatib explained that the 2.02 percent state budget deficit was larger than the deficit projected in the draft 2014 state budget, which stood at Rp154.2 trillion, or about 1.49 percent of the GDP.

He said, however, that the deficit could be staved off to a range between 1.7 percent and 1.8 percent after conducting a discussion with the Working Committee of the Budgetary Body.

"The deficit could be offset to a range between 1.7 percent and maximum 1.8 percent, so that the financing costs will only reach Rp27 trillion - Rp30 trillion. This does not yet constitute a best effort. We still want to discuss it with the working committee," the finance minister said.

In the working meeting with the House Budgetary Body, Chatib said the budget deficit was caused by the difference between state revenues, amounting to Rp1,640.3 trillion and state expenditures, which were predicted to reach Rp1,849.8 trillion.

Of the state revenues, tax receipts will contribute Rp1,270.9 trillion, down by Rp39.4 trillion from the draft 2013 state budget projection at Rp1,310.2 trillion.

"In general, there will be an increase in tax revenues by increasing the number of tax officers by 3,000 personnel and by an increase in the tax resource bases which have not yet been tapped, such as the property sector," the minister said.

Of the state expenditure of Rp1,849.8 trillion, the central government`s expenditure is estimated at Rp1,274.9 trillion, up Rp44.6 trillion from the draft 2014 state budget, which was Rp1,203.3 trillion.

Capital expenditures of Rp205.8 trillion did not change and neither did goods and employee expenditures, which were set in the draft 2014 state budget at Rp203.7 trillion and Rp276.7 trillion, respectively.

However, energy subsidy expenditures are predicted to increase as a result of the rupiah depreciation against the US dollar from the draft 2014 state budget projection of Rp284.7 trillion to Rp328.7 trillion.

Also, funds to be transferred to regions are expected to drop by Rp11.6 trillion from Rp586.4 trillion to Rp574.8 trillion.

Further, all of the government`s assumptions in the draft 2014 state budget were based on basic macro economic assumptions which had been agreed to by the House Commission VII and Commission XI.

The basic assumptions were, among others, based upon economic growth at 6.0 percent, inflation at 5.5 percent, a three-month SPN interest rate at 5.5 percent and a rupiah exchange rate at Rp10,500 per US dollar.

Also, the Indonesian Crude Price was set at a range of 100 - 115 US dollar per barrel, oil pumping at 870 thousand barrels per day, gas extractions at 1,240 barrels of oil equivalent per day and subsidized oil volume at 50.5 million kiloliters.(*)

Editor: Heru Purwanto
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