ASSUMED OIL PRICE FOR 2010 US$77 PER BARREL

Jakarta, Feb 19 (ANTARA) - Finance Minister Sri Mulyani Indrawati said the assumed oil price for 2010 in the revised state budget would be reduced to US$77 per barrel.

"We will reduce the assumed oil price a little from initially between US$75 and US$80 per barrel to US$77 per barrel now," she said at her office on Friday.

She said the change was made in view of developments and in consideration of current economic conditions particularly the prospects of economic recovery.

"When we first set the price it was close to US$80 per barrel. As the government's policy was aimed at maintaining the price stability we then decided to make the US$80 price the initial benchmark price. It was indeed overshot then, and so US$77 is considered more correct, not too high to overshoot but is also quite high to capture price changes," she said.

The minister said there were also changes in the assumptions for the inflation rate for 2010 as Bank Indonesia saw a bigger risk in the current assumption of five plus and minus one and it was changed to six percent.

"The assumed inflation rate is changed because Bank Indonesia stated yesterday it saw a bigger risk in the five plus one at the upper end and so we conducted an evaluation," she said.

The minister said the three-month rate of Bank Indonesia Certificate (SBI) also changed to seven percent with the possibility of a change in the assumed exchange rate of the rupiah now still standing at Rp10,000.

She said the change in the macro-economic assumptions would have an effect on state revenues.

"Yes, it does very much, worth around Rp9 trillion if I am not wrong, coming from the change in the price of oil and the exchange rate against inflation," she said.

She said with the change in the macro-economic assumptions she expected the realization of deviations in the assumed 2010 state budget to be below three percent after deviations in the 2009 state budget reached 2.9 percent.

The target of deviations in the 2010 national budget is set at 10 percent but she hoped its realization will be less than three percent.

"The target is 10 percent but we hope its realization will be below three percent," she said.

Based on macro-economic assumptions for 2010 according to the finance ministry economic growth is set at 5.5 percent, inflation 5.0 percent, rupiah exchange rate Rp10,000, the SBI three-month rate at 6.5 percent, the oil price at US$65 per barrel and oil lifting at 0.965 million barrels a day.