Jakarta (ANTARA News) - Deputy Finance Minister Anny Ratnawati has hope the rate of inflation could be maintained between 6 to 7 percent although the government has finally raised fuel prices.

"Hopefully it will not reach that level (seven per cent) because Bank Indonesia has already said that the core inflation could be reduced. However the implication of a fuel price rise would certainly affect inflation," she said here on Wednesday.

Anny noted that the poor would certainly be affected by the subsidized fuel price hike.

In view of that, the government would continue the rice for the poor program and provide compensation so they could meet their basic needs.

"We will maintain the price of rice and rice for the poor will continue. Usually in case of inflation, it is the poor that are affected and therefore we will keep the rice for the poor and school student assistance," she said.

Regarding possible expansion of the budget deficit to 2.2 per cent in the revised national budget, she said the government would increase funding with the excess funds from the previous year`s budget and issuance of state bonds.

"We will see later if there are excess funds that we can use. The principle is the government would assure that the additional funding if state bonds are issued could be managed efficiently and at a low cost," she remarked.

Apart from that she said the government would also get additional funds from cuts in the operational expenditures at state institutions, estimated to reach Rp22 trillion.

She said due to difficulties in predicting the Indonesian crude oil price in the past two months, the budget deficit has surpassed the assumption set at the 2012 budget at 1.5 per cent.

The fluctuating world crude oil price caused the government to submit a revised budget proposal earlier in March due to changes in the nature of the budget.

Moreover, there has been no certainty yet regarding decisions on fuel subsidies, on whether the government would raise the price of subsidized fuel or restrict their use.

"That is what still needs to be calculated," she noted.

Editor: Priyambodo RH
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