JAKARTA, Dec 6: Indonesia has secured emergency loans worth $5 billion to help plug its budget deficit and boost growth, authorities have said.

“The loans, which come from the World Bank, the Asian Development Bank, Japan, Australia and France, can be drawn upon whenever Indonesia needs them,” finance ministry official Rahmat Waluyanto told AFP on Saturday.

“Donors still perceive Indonesia as an important and strategic country. We should keep the momentum of our economic development going,” he said, adding that raising money through government bonds would prove expensive due to high interest rates.Waluyanto said that Indonesia would only use the standby loans if economic growth slowed to 5.8 per cent in the first quarter of 2009.

The Indonesian economy grew by 6.1 per cent in the third quarter of this year.

However, the government has adjusted its 2009 growth forecast from 6.3 per cent to 4.5-5.0 per cent in light of the global downturn.

Indonesia’s current account deficit narrowed in the third quarter of 2008 to $0.6 billion from $1.2 billion in the second quarter on lower oil costs, the central bank said in a statement.

The current account, Indonesia’s broadest measure of trade with the rest of the world, includes goods, services and income flows.

A drop in oil prices over the period cut the deficit in the oil trade balance in Indonesia, a net oil importer, Bank Indonesia said in a statement on its website.

The current account deficit was also offset by a $0.5 billion surplus in the capital and financial account, which narrowed the deficit in the overall balance of payments to $89 million from $1.3 billion.

Foreign exchange reserves fell to $57.1 billion in the third quarter compared with $59.4 billion in the second quarter, the central bank said. For a table of the data click Indonesia’s government may cut the prices of subsidised gasoline and diesel fuel to ease the burden on people and businesses, President Susilo Bambang Yudhoyono said on Friday.

Indonesia cut subsidised gasoline prices by 8 per cent effective from December 1 after a sharp drop in global oil prices but left the price of subsidised diesel fuel unchanged.

Indonesia has slashed its 2009 growth forecast from 6.3 per cent to 4.5-5 per cent next year, as global economic conditions deteriorate.

Bank Indonesia cut its benchmark interest rate by 25 basis points to 9.25 per cent on Thursday, the first cut in a year to spur economic growth in the face of a severe global downturn.

Traders said the rate cut showed the central bank was more confident of defending the rupiah currency, which has lost more than 20 percent this year against the dollar.—Agencies