Jakarta (ANTARA News) - Chief economic minister Boediono said Indonesia had to achieve an inflation rate of between three and four percent in the medium term in order to create better economic conditions.
"We will keep striving to lower the inflation rate in the medium term to three or four percent. We will continue to work hard to achieve this goal. We have an inflation targeting framework in the monetary sector but we should adjust it to our conditions," Boediono told reporters here on Friday.
He said he hoped in the fiscal aspect there would be no excessive turbulences in the medium term so that Indonesia`s target to achieve an inflation rate of three to four percent would not be disturbed.
Boediono said in the flow of goods aspect, a low-cost and better national logistics management was needed.
"If the various problems can be overcome, the inflation rate target of three to four percent can also be achieved. We will do our best in the monetary sector with our friends at Bank Indonesia (BI)," said Boediono who is to be installed as BI governor on May 22, 2008.
He said the trigger of the inflation rate now was not the monetary factor alone but also non-monetary factors, particularly global pressures. But it was hoped that in the medium term the problem would be overcome.
Boediono said present inflationary pressures were taking place due to the problem of goods supply which could not overcome only by raising the interest rates.
He said the inflationary pressures could be eased by reducing the secondary effects of the fuel oil price hikes to be announced shortly.
"If we force ourselves to raise the interest rates it will not work," he added.(*)