Accroding to Acting Head of the Finance Ministry`s Fiscal Policy Affairs Bambang Brodjonegoro here on Wednesday, the government should use bilateral and multilateral loans to narrow its deficit in an effort to reduce its dependence on the issuance of state debentures.
"We have to take into account the country`s debts so that their volumes would not be too big. The House of Representatives (DPR) should accept financing sources not from state debentures but from international institutions whose cost of funds are actually lower," he said.
He said that the funding of the deficit could be cheaper with external loans and this would become the finance ministry`s fiscal policy and 2012 state budget strategy concept, if the DPR approved it.
"External loans are far cheaper and their interest rates are far lower than those of state debentures. After all, external loans have a grace period, state bonds have not," he said.
He said that in order to achieve the development goals, the government was considering fiscal continuation with a deficit of 1.4-1.6 percent to be supported by efforts to increase the volumes and quality of state expenditure.
(Uu.A014/HAJM)
Editor: Priyambodo RH
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