For 2008 next year, Indonesia assumes an economic growth target of 6.8% and a Budget deficit of 1.7% of GDP said Finance Minister, Sri Mulyani…
In 2007, however, the government’s budget deficit is expected to expand from 1.1% of GDP (or Rp. 40.5 trillion) to between 1.2% to 2% (or an estimated Rp. 60 trillion to Rp. 65 trillion), whereas government’s revenue is expected to reach Rp. 723.1 trillion, and government spending Rp. 763.6 trillion.
This increase was caused by added government spending to assist and recover from the many natural disasters, as well as the increased payments on subsidies carried over from last year. Over the past three years, spending by government agencies has continuously increased, and it is hoped that with increased government spending this will accelerate economic growth, reported Bisnis Indonesia.
That looks like a sensible policy. Perhaps, we can say that gone are the days of balanced-budget zealotry.
From Wuryastuti Sunario’s Indonesia Digest.