Indonesia to cut budget deficit to ease bond sales

Published: May 4, 2008, 9:56 pm

Tags: news, indonesia news, indonesia to cut budget deficit to ease bond sales

MADRID, May 4 (Reuters) - Indonesia will reduce its budget deficit by cutting fuel subsidies ahead of planned global bond sales this year worth around $12 billion, a senior finance ministry official said on Sunday. Fuel and electricity subsidies of $20.5 billion this year are hampering Indonesia’s efforts to raise money on the global capital markets, the country’s fiscal policy chief told a forum at the Asian Development Bank’s (ADB) annual meeting. “It seems the market doesn’t welcome our effort to tap (issue new bonds). We have to bear (a higher) cost of financing. We have to reduce the budget deficit for investor confidence,” Anggito Abimanyu said, adding that the government had so far raised only $5.5 billion out of a total planned bond issuance of $17.1 billion for 2008. The country is planning its first sovereign Islamic bond issue in Indonesian rupiah and U.S. dollars, in addition to another global bond offering. The Islamic bond

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