March inflation eases, but threat remains<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The Central Bureau of Statistics (BPS) reported on Monday that
\ninflation eased slightly in March, but warned that high
\ninflationary pressures remained a threat, particularly following
\nthe latest fuel price hike.<\/p>\n
The BPS said that prices as measured by the consumer price
\nindex (CPI) were down 0.02 percent from the previous month's
\nlevel. The monthly inflation rate in February was 1.5 percent.<\/p>\n
The bureau said that on an annualized basis, inflation in
\nMarch was running at 14.08 percent, down from 15.15 percent the
\nprevious month.<\/p>\n
BPS chief Soedarti Surbakti said that the lower inflation in
\nMarch was due to the good rice harvest and improvements in the
\ndistribution of basic goods.<\/p>\n
Severe floods, particularly in the Greater Jakarta area during
\nthe previous month, had disrupted the distribution of goods and
\ncontributed to the high rate of inflation in February.<\/p>\n
But Soedarti said that the latest fuel price hike would
\ntrigger inflationary pressure this month.<\/p>\n
State-owned oil and gas firm Pertamina has raised the prices
\nof most fuels for public and industry consumption this month
\nfollowing a rise in global crude oil prices.<\/p>\n
Fuel prices are adjusted monthly in accordance with
\ninternational price movements.<\/p>\n
A higher inflation rate in April would pose an uphill
\nchallenge for the government in meeting its single-digit target
\nfor this year.<\/p>\n
While the government has forecast inflation at nine percent
\nthis year, the cumulative figure after three months already
\nstands at 3.5 percent.<\/p>\n
Controlling inflation is crucial to protecting people's real
\nearnings, which have already been badly hit by the prolonged
\neconomic crisis.<\/p>\n
Lower inflation will also allow the central bank to further
\ncut its benchmark interest rate, which in turn will reduce the
\nburden on the state budget in covering the interest on the
\nmassive amount of government bonds that have been issued in
\nrecent years.<\/p>\n
The BPS said that food prices in March were down 2.82 percent
\nmonth-on-month, processed food up by 0.18 percent, transportation
\nand communications costs up 4.47 percent, housing up 0.86
\npercent, clothing down 0.13 percent, healthcare costs up 0.59
\npercent, and education, recreation and sport up 0.33 percent.<\/p>\n
Elsewhere, the bureau also announced improved trade figures,
\nwith exports in February showing their best monthly performance
\nsince October as imports also continued to increase.<\/p>\n
Exports in February increased 4.36 percent to US$4.18 billion
\nfrom $4 billion in January. Meanwhile, imports rose by 4.74
\npercent to $1.98 billion from $1.89 billion.<\/p>\n
That left a trade surplus of $2.2 billion in February, up from
\n$2.1 billion the previous month.<\/p>\n
Meanwhile, total exports after two months reached $8.18
\nbillion, down from $9.13 billion a year earlier, while imports
\nfell to $3.87 billion from $6.12 billion a year earlier.<\/p>\n
\"The stronger exports in February can be attributed to the
\n(recovery in the) U.S. and Japanese economies,\" Soedarti
\nexplained, adding that exports to the two countries recorded an
\nincrease over the previous month.<\/p>\n
Citibank economist Anton Gunawan concurred, saying that the
\nrecovery in both the U.S. and Japan was moving ahead faster than
\npreviously expected.<\/p>\n
\"Their faster-than-expected economic recovery is helping boost
\ntrading performances in export-oriented Asia, including
\nIndonesia,\" Anton said.<\/p>\n
He said that the better trade figures were a good signal for
\nthe economy.<\/p>\n
\"These are positive signals for the country, showing that the
\nwheels of the economy are moving,\" Anton told The Jakarta Post.<\/p>\n
However, the country's total exports throughout the year,
\nAnton went on, would probably stand at between $54 billion and
\n$55 billion, lower than the $56 billion recorded in 2001.<\/p>",
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