Revised 2014 state budget may see widening deficit

Jakarta (ANTARA News) - A deficit in the revised 2014 state budget may exceed the target of 1.69 percent of the national gross domestic product (GDP), Deputy Finance Minister Bambang Brodjonegoro hinted.

"Lets wait and see. But it will not exceed the threshold of 2.5 percent," he said here on Friday.

He did not elaborate on whether the widening budget deficit will result from declining tax receipts or rising state spending on energy subsidy which always exceed its target every year.

But he gave the assurance that the government will slash unnecessary spending and will not make new loans to finance the state budget in anticipation of the widening budget deficit this year.

"Making new loans is very risky," he said.

In the 2014 state budget, the government and the House of Representatives (DPR) have agreed to set state revenues at Rp1,667.1 trillion and state spending at Rp1,842.5 trillion, with a deficit forecast of Rp175.4 trillion or 1.68 percent of the GDP.

Director General of Taxation Fuad Rahmany predicted tax receipts will fall short of the target of Rp1,110.2 billion set in the 2014 state budget.

The government will likely revise downward the target of tax receipts in the revised 2014 state budget, he said.

"As we all see the macro assumption has changed very much, including the economic growth. If the economy grows at lower pace, the amount of tax receipts will become lower," he said.

The government is expected to submit a draft of the revised 2014 state budget to the DPR before the legislative elections on April 9 as several macro assumptions in the 2014 state budget such as the rupiahs exchange rate, oil and gas lifting (sold) are no longer relevant to the outlook until the end of this year. (*)