The Indonesian government said that it would finance the possibility to increase subsidies on the oil sector because of the impact of the global economic slowdown, Indonesian Finance Minister Sri Mulyani Indrawatis aid here Monday.
Minister Mulyani said that the global slowdown, the soaring world's oil price and skyrocketing commodities prices, had poorly impact on the country's state budget deficit. The new revision of the country's state budget had indicated an extension of the deficit from 1.7 to 2.1 percent of the GDP, or 93 trillion rupiah (about 10.33 billion U.S. dollars), she said.
"Should the subsidies rise, the hike could be financed from the increase of oil price itself. And should it is not sufficient, the hike would be financed from the cut of 10 percent of the ministries budget," Mulyani told a joint press conference after a cabinet meeting at the State Palace here.
The cut of the 10 percent of the ministries budget provided funds of about 30 trillion rupiah (some 3.3 billion U.S. dollars),she said.
The government and the parliament had assumed 95 U.S. dollars oil price on the state budget.
"Should there be some other scenarios, the government and the parliament would conduct an intensive consultation," she said.
On the state budget deficit, she said that the government would finance it from funds received from the issuance of obligation and foreign loans.
The minister said that the government of Japan had agreed to add its loan to Indonesia up to 500 million U.S. dollars, and the World Bank and the Asian Development Bank also agreed to provide 2.6 billion U.S. dollars of loans for Indonesia.
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