The economy is expected to grow 4.6% in the second half of 2009 from a year ago, Finance Minister Sri Mulyani Indrawati said on Tuesday, Reuters reported.
The budget deficit is forecast to be Rp2.3 trillion ($225.3 million) in the first half of 2009, while the deficit for the year was still expected to be 2.5% of GDP, Indrawati told a House of Representatives budget committee hearing.
Indrawati also said Indonesia had a budget surplus of 0.2% of GDP as of May 29.
Indrawati said private consumption, the backbone of the economy, will likely expand 5.8% on year in the January-June period, whereas government spending will increase 17.7%.
Investment may grow 5.6% in the first half of the year from the same period last year, she said.
Exports will likely decline 16.7% on year for the same period, whereas imports will shrink 22.2%. According to Indrawati, the economy will likely grow 4.1% on year in the first half of the year and 4.6% in the second half.
Indrawati expects the budget deficit for next year to narrow to 1.3% of GDP.
Tax revenue for 2009 is projected at Rp577.6 trillion ($56.604 billion) or 98.3% of Rp587.8 trillion set in the economic stimulus document, Asia Pulse reported Indrawati as telling the meeting. First quarter tax revenue stood at Rp256.7 trillion, accounting for 43.7% of the target for 2009.
The lower-than-expected tax revenues were the result of the global economic slowdown, low imports, a decline in average crude oil prices and a drop in value-added tax on imports, she said.
Income tax on non-oil and gas commodities would likely reach Rp290.9 trillion or 103.6% of the target, income tax on oil and gas commodities Rp49.5 trillion or 127.7% of the target and property tax Rp23.9 trillion or 100% of the target, she said.
Value-added tax and domestic sales tax might reach Rp136.9 trillion or 98.6% of the target and luxury sales tax on imports Rp66.2 trillion or 69.8% of the target, she said.
Establishment of state-owned company to guarantee infrastructure projects
The government is making an attempt to increase private investment in infrastructure by establishing a state owned company that provides guarantee for infrastructure projects run by the government in cooperation with private entities.
As set forth under Government Regulation No. 35 of 2009 (“Regulation 35/2009”) regarding Capital Participation of the State in the Establishment of a State-Owned Company in the Field of Infrastructure Guarantee, dated 5 May 2009, the state’s capital participation in this state owned company is in the amount of Rp. 1,000,000,000,000 (one trillion Rupiah), to be covered by the 2009 State Budget.
Regulation 35/2009 specifically stipulates that the delegation of the Minister of Finance’s authority to the State Minister of State-Owned Enterprises as meant in Government Regulation Number 41 of 2003, does not apply to the subject matter covered under Regulation 35/2009. In other words, this state-owned enterprise is under the authority of the Minister of Finance.