"The BI Rate is also predicted to increase 0.25 percent."
Jakarta (ANTARA News) - Inflation can reach 7 percent if the government raises subsidized fuel oil prices next year, economic observer A Prasetyantoko of the Atma Jaya Catholic University said.

"Inflation is predicted at 4.9 percent if there is no problem arising next year. But if subsidized fuel oil prices are raised it would have a significant impact. Inflation can reach 7 percent," Prasetyantoko said when he was contacted through his cellular phone here on Friday.

He said that if fuel oil price was raised to Rp1,500 per liter the inflation would increase by two percent. Inflation would also have impact on Bank Indonesia (BI) benchmark (BI Rate), he said.

"If inflation increases, the BI Rate is also predicted to increase 0.25 percent from 5.75 percent to six percent," he said.

In the meantime, he also predicted the rupiah currency exchange rate would be at a range between Rp9,600 and Rp9,700 per US$1.

On the export performance, Prasetyantoko predicted that exports would drop and import would jump up next year.

"Imports will remain high and exports will drop," he said.

Last October, the House of Representatives (DPR) endorsed a draft 2013 state budget into law.

In the 2013 state budget, the government and the parliament agreed to set economic growth at 6.8 percent, inflation rate at 4.9 percent, the rupiah`s exchange rate against the dollar at Rp9,300 and interest on three-month state treasury notes at 5 percent.

Indonesian crude price (ICP) was set at US$100 a barrel, oil lifting at 900 thousand barrels per day, gas lifting at 1,360 thousand barrels equivalent to oil per day and oil and gas lifting at 2,260 thousand barrels a day.

State revenues and grants are expected to increase to Rp1,529.7 trillion consisting of Rp1.525.2 trillion from domestic revenues and Rp4.5 trillion from grants.

The domestic revenues comprise Rp1,134.3 trillion from domestic taxes, Rp58.7 trillion from international trade taxes, and Rp332.2 trillion from non-tax state revenues.

The non-tax state revenues consist of Rp197.2 trillion from natural resources, Rp33.5 trillion from the government`s portion of state-owned companies` profit, Rp78 trillion from other non-tax state revenues and Rp23.5 trillion from public service boards.

As such, the tax ratio for 2013 is 12.87 percent.

The government and the DPR also agreed to set state spending for 2013 at Rp1,683 trillion consisting of the central government`s spending estimated at Rp1,154.4 trillion fund transfers to region at Rp528.6 trillion.

The central government`s spending consists of personnel spending at Rp241.1 trillion, spending on goods at Rp167 trillion, capital spending at Rp216.1 trillion, and interest payments at Rp113.2 trillion.

State spending on subsidies is set at Rp317.2 trillion consisting of energy subsidy at Rp274.7 trillion and non-energy subsidy at Rp42.5 trillion.

The energy subsidy consists of subsidy for fuel oils, LPG in 3-kg cylinders and LGV at Rp193.8 trillion and electricity subsidy at Rp80.9 trillion.
(Uu.A014/KR-BSR/B003)

Editor: Priyambodo RH
Copyright © ANTARA 2012