Friday, 8 February 2008
Govt to revise down economic growth
JAKARTA (JP): The government confirmed Friday
a plan to revise the economic growth target down from the 6.8 percent stated in
the 2008 state budget amid soaring global prices for oil and staple food
revision is a must, but we will consider all the plus and minus factors,"
Finance Minister Sri Mulyani Indrawati told reporters as quoted by Antara
newswire Friday. However, she declined to give an exact figure for the new forecast.
On Monday, the
central bank said the country's economy would grow between 6.2 percent and 6.8
percent this year.
Mulyani said the
latest forecast on the country'smacroeconomic fundamentals showed mounting
inflationary pressure as domestic consumption continued to suffer from global
Last month, the
country's inflation rate reached to a 16-month high, with a 1.77 percent
increase, due to the price rises for key commodities, such as rice, wheat and
The changes have
prompted the government to review its assumptions on key variables --
particularly oil prices -- in the state budget while issuing new regulations
last week to stabilize prices. These include various tax incentives for the
Ministry's latest calculations estimate the government's budget deficit to
reach Rp 87.3 trillion (about $9.45 billion), or 2 percent of growth domestic
product (GDP), increasing from 1.7 percent in the current state budget.
The revisions to the
key assumptions, many economists said, were a result of poor economic
forecasting by the government's economic team, which has led to uncertain