Balanced-budget zealotry no more?
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...That looks like a sensible policy. Perhaps, we can say that gone are the days of balanced-budget zealotry.
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.
From Wuryastuti Sunario's Indonesia Digest.
2 comments:
Susah bung!
Di saat semua janji hanyalah sebuah janji, apakah asa yang bisa ditempelkan pada informasi target tersebut?
Kita bukan sedang mengajak pembaca masuk ke jurang pesimisistik. Cuman mau bilang: informasi target tersebut tak berarti apapun.
Lebih baik stay tune di kondisi awal.
The consequence of negative budget is that the interest environment has to be driven to a lower level. Thus, government can obtain loan with a low interest, as can be seen in the decreasing Indo govt bond yield. Decreasing yield trend of govt bond is a good sign for banks to purchase it. So, negative budget with more govt loan is good. Furthermore, reducing interest rate is to control expected inflation at a lower level (Taylor Rule).
One good strategy for our govt.
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