"We will adjust our economic growth down to 6.5 percent," the minister said in Jakarta on Monday. He noted that the government would ask for the revision of the growth target through the 2012 budget in a plenary meeting of the House of Representatives on Tuesday.
The government is certain to change macro assumptions in the revised budget, such as for the Indonesian Crude Price from US$90 to US$105 per barrel and oil lifting from 950,000 barrels per day to 910,000 to 940,000 barrels per day, the minister said.
The rate of inflation initially set at 5.3 percent will be adjusted to 6.0 to 7.0 percent, while the rupiah exchange rate against the US dollar will change from Rp8,800 to Rp8,800 to Rp9,000.
Meanwhile, it has been predicted that the rate of the three-month Bank Indonesia Certificate (SBI) will not change from the present assumption at 6.0 percent, Martowardojo said.
The acting head of the Indonesian Finance Ministry`s fiscal policy department, Bambang Brodjonegoro, however, said that the growth target for this year would not change much from the present assumption.
"We are still within a 6.5 and 6.7 percent range. If a slowdown does occur, it will not be as deep as in 2009," he said.
He believed the ICP assumption would be above US$100 while the rate of inflation was assumed to be at 6.0 to 7.0 percent, and the three-month SBI would remain at 6.0 percent.
"Even now the rate of state bonds (SPN) has been very low, while its supply is limited. So, it will not be affected," Brodjonegoro said referring to the SBI rate.
About the drop in the rupiah exchange rate to Rp8,900 against the US dollar, Brodjonegoro noted that the assumption would support the business climate and trade transactions .
"From the economic point of view, we have seen how the rupiah exchange rate of Rp9,000 per US dollar has helped in the balance of payment. We have seen that the trade balance had declined a bit, but it remained positive, although exports slowed down. We hope the present rate would be more friendly for businesses," he said.
On the possibility for the budget to expand to 2.2 percent from 1.5 percent, he said it could be a result of the rise in Indonesian Crude Price to US$120 per barrel and the uncertainty with regard to the government`s decision to raise the price of gasoline. "So, if the fuel oil policy could reduce the deviation, perhaps the deficit would not expand too far away from the existing one," he said.
Addressing the issue of the proposed electricity price hike of 10 percent in April, he said the government remained consistent with the 2012 budget law. "We will not move away from the government's proposal put in the 2012 budget, namely 10 percent. It is only about when it would be implemented and to what extent, which is still to be determined by the House of Representatives," he said. *
(H-YH/INE)
Editor: Ade P Marboen
Copyright © ANTARA 2012
