DRAFT 2010 STATE BUDGET TO EMPHASIZE ECONOMIC RECOVERY: MINISTER

Jakarta, Apr 22 (ANTARA) - The government will focus on restoring the economy and improving the people's living standards in drafting the 2010 state budget, a minister said.

"We made fiscal policies by putting an emphasis on restoring the economy and improving the people's living standards," Finance Minister Sri Mulyani Indrawati said in her address to a coordination meeting of national development at the National Development Planning Agency (Bappenas) building here on Wednesday.

Sri Mulyani, who is also acting coordinating minister for economic affairs said the economy was projected to expand in the range of 5-6 percent and the inflation rate could be kept down to 4.5-5.5 percent next year.

Interest rate was projected at 6-7 percent, the rupiah's exchange rate at Rp9,500-10,500 per dollar, oil prices at US$45-60 per barrel and oil production at 950-970 thousand barrels per day, she said.

Given the assumptions, the government hoped a deficit in the 2010 state budget to reach 1.3 percent of the gross domestic product (GDP) as the economic slowdown would lower state receipts, she said.

"When state revenues fall the economy also slows down. Therefore, we will maintain the fiscal stimuli although they will be provided more selectively and evaluated in the future," she said.

She said the government would continue to provide tax incentives by reducing the tariff of income tax on corporate taxpayers and granting government-borne tax privileges.

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