BI sees year-on-year inflation at 18%
BI sees year-on-year inflation at 18%
The Jakarta Post, Jakarta
Bank Indonesia sees on-year December inflation staying at 18
percent with carry-over inflationary pressure from the recent
fuel price increases and public spending during the Muslim
holiday period as likely to abate within the month.
"I expect year-on-year inflation this month (December) to
stand at around 18 percent," said governor Burhanuddin Abdullah
on Tuesday after a meeting with House of Representatives
Commission XI for financial affairs.
Burhanuddin refused to elaborate. However, his deputy Aslim
Tadjuddin said that growth in consumer prices on a monthly basis
may be slower in December, as compared to 1.3 percent in
November.
"The impact of the recent fuel price hike and higher public
consumption during the Idul Fitri holiday have all been counted
in November. I expect those factors will no longer affect
December's figure," said Aslim.
The year-on-year inflation rate skyrocketed to a six-year high
in November at 18.4 percent, mostly as a prolonged impact of the
government's decision to more than double retail fuel prices on
Oct. 1, and high consumer spending in relation to Idul Fitri.
As for next year, Aslim was optimistic that full-year
inflation would decline to "8 percent plus-minus 1 percentage
point."
The central bank also highlighted its optimism over the
rupiah, which it estimated would remain steady at between Rp
9.700 and Rp 9.800 against the U.S. dollar in the near future,
due primarily to a declining dollar demand from state oil and gas
company PT Pertamina.
"Our foreign exchange reserve is likely to stand at US$34
billion by the end of the year because the dollar demand from
Pertamina to import fuel has significantly declined. The firm
usually needs between $1.5 billion and $2 billion for monthly
purchase," said Aslim.
Still, the central bank warns that a fluctuation in the
currency is likely to occur, probably during the first quarter of
the year.
This is primarily due to the tight monetary policies applied
by the U.S. Federal Reserves, which could attract investors into
dollar-denominated assets, amid a sluggish inflow of foreign
investment into the country's real sector.