Jakarta – Indonesian officials fear the government might not meet its 6.5 trillion rupiah privatisation target this year amid weak markets.
"I have talked to the IMF staff about the progress of the privatisation of state companies, and looking at the conditions, we suggested revising the target to four trillion rupiah," the finance ministry's director-general for state enterprises, Mr Njoman Tjager, told reporters.
But it was not clear if the government had proposed formally the revised target to the International Monetary Fund (IMF), which is spearheading an international bail-out for the country.
Asked if cutting the target could affect the disbursement of already-delayed IMF funds, Mr Tjager said: "We will explain this issue." He did not elaborate.
Relations between Indonesia and its key donor have soured over a raft of missed economic reform targets and concerns over controversial changes to the central bank law. The IMF had delayed US$400 million in loan disbursements since the end of last year.
In its Budget for this year, Indonesia said it planned to privatise 16 companies to raise 6.5 trillion rupiah. The latest Budget approved by parliament put the deficit at 52.5 trillion rupiah, or 3.7 per cent of gross domestic product, and the privatisations have become crucial as a plunging currency, higher interest rates and lower-than-expected revenue elsewhere look set to worsen the deficit.
The one-month benchmark interest rate reached 15.82 per cent at the last weekly auction, its highest since mid-July 1999. The rupiah broke the psychological level of 10,000 early last month and has hovered around 29-month lows, weighed down by political insecurity.
High rates and the currency's woes have helped to push the stock market down by more than 11 per cent this year, after losing 40 per cent last year. The slide has already forced the government to revise targets for some companies.
It had hoped to raise up to 376 billion rupiah from pharmaceutical company Indofarma, which listed on the Jakarta exchange yesterday. Instead, the 596.9 million new Indofarma shares netted 149 billion rupiah.