The Indonesian government expects the country’s economy to expand as much as 6 percent next year, widening the 2010 budget deficit to accelerate growth, the local media reported.
In achieving the growth, the government aims to slow the inflation to between 4.5 percent and 5.5 percent, estimating the central bank's benchmark rate at 6 percent to 7 percent, Finance Minister Sri Mulyani Indrawati was quoted by the Jakarta Post daily as saying.
The proposed 2010 state budget deficit will be set at 1.3 percent although may be stretched up to 1.5 percent in consideration of some priorities needed to boost economic recovery.
Minister Mulyani said the government's priorities in 2010 is economic recovery, therefore the real sector will continue to receive income tax cut.
The government will also provide stimulus to raise people's purchasing power, while creating labor-intensive programmes to absorb employment, including the empowerment of people living in rural areas.
To finance the programmes, the government will intensify bureaucracy reform, particularly in the taxation and customs sector, she added.
This year, the economy may only expand by between 4 and 4.5 percent, down from 6.1 percent posted in 2008. the Finance Ministry said./.