GOVT AIMS TO CUT DEBT-TO-GDP RATIO

Jakarta, Aug 16 (ANTARA) - The government aims to cut the country's debt-to-gross domestic product (GDP) ratio to 26 percent next year from 27.8 percent this year.

"The lower debt-to-GDP ratio will, God willing, be able to strengthen the structure of our fiscal resilience in line with the government's objective to achieve sustainable fiscal self-reliance," President Susilo Bambang Yudhoyono said when delivering the draft 2011 state budget and its financial notes to a plenary session of the House of Representatives (DPR) here Monday.

Sustainable fiscal self-reliance was part of the government's efforts to preserve economic resilience, he said.

The government projected the 2011 state budget deficit at Rp115.7 trillion or 1.7 percent of GDP. The figure represented a decline of Rp18.1 trillion or 13 percent of the 2010 state budget deficit target of Rp133.7 trillion or 2.1 percent of GDP, he said.

The reduction in the state budget deficit had to do with the direction of consolidated fiscal policies to create a healthier and more balanced state budget in the future, he said.

"The higher deficit will only cause our debts to go beyond a safe ratio and add to the burden of future governments," he said.

He said the government would use both local and foreign financing sources to offset the budget deficit.

The local financing sources would chiefly come from the issuance of state debt securities, and the foreign financing sources from the withdrawal of offshore loans including program and project loans, he said.