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Jakarta moves to cut fuel subsidies to prevent bulging deficit

Against a backdrop of street protests and political wrangling, Indonesia's government is struggling to end fuel subsidies, saying a price increase is needed to arrest its expanding fiscal deficit

In a speech, President Susilo Bambang Yudhoyono announced that there was an urgent need to cut the bulging fuel subsidy bill to prevent the 2013 budget deficit ballooning beyond a legal limit of 3% of gross domestic product. He stopped short of committing to how much prices, unchanged for more than four years, will rise and when, saying only that he expected a decision in May, once the government had worked out a plan to shield the poor from the subsequent inflationary pressures. Indonesia's fuel subsidies, budgeted at 193.8 trillion rupiah ($20 billion) this year and likely to increase to 297.7 trillion rupiah if no action is taken, have proved one of the trickiest issues for Yudhoyono's

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