AFP, Jakarta
Southeast Asia's biggest economy can expect strong growth of 6.2 percent next year despite a global outlook "wrought with challenges," Indonesian President Susilo Bambang Yudhoyono said on Friday. Unveiling the 2009 draft national budget, Yudhoyono said Indonesia would be able to further its economic transformation while bringing inflation under control and spending more on high civil service salaries and education. "From its dismal condition 10 years ago, Indonesia has transformed today into a dynamic national full of hope," he told lawmakers in a major address two days before the country celebrates its independence day. "However despite all this our nation continues to be impacted by a number of serious trials... The price of oil has reached the highest level in history. The price of food all over the world has drastically soared." The budget predicts economic growth of 6.2 percent with inflation at around 6.5 percent, well down from its current peaks around 12 percent after hikes in subsidised fuel prices and the surge in commodity prices this year. Expenditure is expected to rise 13.4 percent to 1,222 trillion rupiah (133 billion dollars), while revenue is expected to jump 14.3 percent to just over 1,000 trillion rupiah, the president said in a speech to parliament. The government expects a budget deficit of 1.9 percent of gross domestic product compared with the 1.5-1.8 percent expected this year, Yudhoyono said. "The budget for education has risen to almost double from 78.5 trillion rupiah in 2005 to 154.2 trillion in 2008," he said. "In fact, for the 2009 budget, in the midst of the global oil and food price crisis that has adversely impacted our economy, we have been able to meet the 20 percent of the state budget requirement for education as mandated by the constitution." The wider deficit expectation stems partlyfrom a proposal to increase civil- servant salaries by 15 percent on average, and the increase in education expenditure to 20 percent of government spending from around 15 percent this year. The budget allocation in 2009 would be geared toward stimulating growth, expanding employment opportunities and alleviating poverty, the president said.
Southeast Asia's biggest economy can expect strong growth of 6.2 percent next year despite a global outlook "wrought with challenges," Indonesian President Susilo Bambang Yudhoyono said on Friday. Unveiling the 2009 draft national budget, Yudhoyono said Indonesia would be able to further its economic transformation while bringing inflation under control and spending more on high civil service salaries and education. "From its dismal condition 10 years ago, Indonesia has transformed today into a dynamic national full of hope," he told lawmakers in a major address two days before the country celebrates its independence day. "However despite all this our nation continues to be impacted by a number of serious trials... The price of oil has reached the highest level in history. The price of food all over the world has drastically soared." The budget predicts economic growth of 6.2 percent with inflation at around 6.5 percent, well down from its current peaks around 12 percent after hikes in subsidised fuel prices and the surge in commodity prices this year. Expenditure is expected to rise 13.4 percent to 1,222 trillion rupiah (133 billion dollars), while revenue is expected to jump 14.3 percent to just over 1,000 trillion rupiah, the president said in a speech to parliament. The government expects a budget deficit of 1.9 percent of gross domestic product compared with the 1.5-1.8 percent expected this year, Yudhoyono said. "The budget for education has risen to almost double from 78.5 trillion rupiah in 2005 to 154.2 trillion in 2008," he said. "In fact, for the 2009 budget, in the midst of the global oil and food price crisis that has adversely impacted our economy, we have been able to meet the 20 percent of the state budget requirement for education as mandated by the constitution." The wider deficit expectation stems partlyfrom a proposal to increase civil- servant salaries by 15 percent on average, and the increase in education expenditure to 20 percent of government spending from around 15 percent this year. The budget allocation in 2009 would be geared toward stimulating growth, expanding employment opportunities and alleviating poverty, the president said.
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