The government was planning to set the amount of gross debts at Rp296 trillion for 2012. The fund would be used to cover a budget deficit of around Rp125.6 trillion and meet financial obligations.
Jakarta (ANTARA News) - The government will rely on the issuance of local bonds to cover a deficit in the 2012 state budget, a Finance Ministry official said.

"As part of the strategy to meet financing needs in 2012 the government will rely on local bonds and domestic loans," the director of strategy and debt portfolio at the ministry`s directorate general of debt management Ayu Sukorini said here on Thursday.

She said total state spending for 2012 had been set at more than Rp1,400 trillion, part of which must be financed with loans.

"In 2012 (the state budget) is projected to see a deficit of 1.5 percent of the gross domestic product (GDP) or about Rp125 trillion," she said.

She said the government had been determined to reduce the amount of foreign loans and therefore, the amount of funds to repay foreign debts in 2012 would be larger than that of new loans to be made next year.

In addition, she added the government would also rely on loans from state-owned banks to meet financing needs in 2012 as it did in 2011.

"The loans from the domestic banking industry will chiefly be used to purchase local products for state security and defense," she said.

The government was planning to set the amount of gross debts at Rp296 trillion for 2012. The fund would be used to cover a budget deficit of around Rp125.6 trillion and meet financial obligations, she said.

The government`s debts in 2012 would consist of state debt securities worth Rp240 trillion, program loans worth Rp16.86 trillion, project loans worth Rp39.13 trillion and domestic loans worth Rp134 billion, she said.

Director General of Debt Management at the Finance Ministry Rahmat Waluyanto said the government would in 2012 focus its debt management policy on rupiah-denominated state bonds and sharia bonds which were project-oriented to finance infrastructure development.

"We will also try to reduce the amount of foreign loans," he said.

The amount of government debts currently reached Rp1,740 trillion, including offshore loans or commercial credits worth Rp700 trillion from multilateral creditors, he said.(*)

Editor: Heru Purwanto
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