Jakarta – The International Monetary Fund Friday praised Indonesia's 2004 budget proposal, which aims to reduce the budget deficit to 1.2% of the gross domestic product from 1.8% this year. "It's a good budget policy," David Nellor, the IMF'srepresentative in Indonesia, told reporters.

President Megawati Soekarnoputri said in her speech to the parliament that the government will continue to implement strict belt-tightening measures aimed at getting the country's financesback in shape.

Total expenditures are forecast at Rp 368.8 trillion rupiah (U$43.1 billion), down 0.5% from this year, while revenues are slated to jump 2.3% to Rp 343.9 trillion.

The IMF has led a multibillion-dollar bailout program for Indonesia since the 1997-98 Asian financial crisis. Indonesia has said it won't borrow from the fund again when its current $5 billion lending program runs out at the end of this year.