Indonesia: Parliament approves revised budget, fuel price hikes to follow

Indonesia’s parliament has approved the revised 2013 state budget which includes additional measures to compensate lower income families for additional expenditure arising from higher fuel prices. The approval of the revised budget will pave the way for the Ministry of Finance (MoF) to lower fuel price subsidies, which will see the price of subsidized gasoline likely jump by 44% and the price of subsidized diesel fuel rise by 22% based on current indications.
“We expect the announcement of the MoF to follow shortly. As such, we are raising our 2013 and 2014 inflation forecast to 6.9% and 6.4% respectively from 5.6% and 5.4% previously,” according to a research report published by Credit Suisse.