"With the adjustment, we hope deficit would not widen. We still see that room could still be controlled within the deficit corridor," Sri Mulyani said.
Jakarta (ANTARA News) - Finance Minister Sri Mulyani Indrawati said she is optimistic the deficit of the 2016 state budget is still within a safe corridor although with additional financing.

"With the adjustment, we hope deficit would not widen. We still see that room could still be controlled within the deficit corridor," Sri Mulyani said after the closing ceremony of the 12th World Islamic Economic Forum (WIEF) here on Thursday.

The government has cut spending budget by Rp133.8 trillion this year including Rp65 trillion for spending by ministries/state agencies and Rp68.8 trillion for transfer to the regions.

The minister said in the past two years, tax revenues have decreased as a result of falling prices of commodities including oil and gas, coal, and palm oil, the countrys main export earners.

The trade and construction sectors were also depressed in 2016 as indicated by the volume with growth rate of only half of the previous years growth rate.

In addition, the global trade slump resulted in a contraction in the countrys economy in 2015 and 2016.

Under such condition, the minister predicted a sharp fall in tax revenues in 2016 .

In 2014, tax revenue was Rp100 trillion short of the target and in 2015 , the shortfall was larger at Rp249 trillion .

In 2016, barring revision, tax revenues would fall Rp219 trillion short of target , the minister predicted.

With the cut in the state budget, the state budget is still estimated to have a deficit of 2.5 percent of the GDP , higher than the target of 2.35 percent set in the 2016 budget. Therefore, there was an additional financing of Rp17 trillion.

The minister repeated statement that the budget for priority projects or program would not be cut.

"The president has seen there is ample room for efficiency such as through cut in cost of travels or non priority operational costs. Therefore , there is no need to cut spending for priority programs such as infrastructure projects," she said.(*)

Editor: Heru Purwanto
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