Limited Use of Fuels May Prevent Deficit from Widening

Jakarta, Aug 11 (Antara) - The policy to limit the use of subsidized fuels will help prevent the budget deficit set at 2.4 percent of the gross domestic product (GDP) from spreading further, a Finance Ministry official said. "If we do not implement some measures, our deficit may soar to more than 2.4 percent of the GDP set at the revised 2014 state budget. It is too risky to let the deficit hover above 2.4 percent of the GDP," Director General of Budget at the Finance Ministry Askolani said here on Monday. In the short run, the policy was quite proper. It will be better, however, if the policy was followed by further solution to ease the burden of fuel subsidy spending and make fiscal resilience stable, he pointed out. "In the short run, this is a maximum effort. But additional policy, which is considered suitable, is still possible, such as the one proposed by the Jakarta provincial government," he noted. He made it clear that the reduced consumption of subsidized fuels will have several benefits. One of the benefits was that the government will have an adequate fiscal room to spend on more productive activities. "We can switch spending from consumptive to productive activities such as education and health. If everything is spent on fuel oils, the state budget will have no reserves for more useful spending," he explained. (*)