Consumer price index fell 0.68 percent in September

Consumer price index fell 0.68 percent in September

JAKARTA (JP): Indonesia's consumer price index continued to
decline in September, falling by 0.68 percent thanks in large
part to a drop in food prices, the Central Bureau of Statistics
(BPS) reported on Friday.

BPS chief Sugito Suwito said September's deflation, the
seventh consecutive month of falling prices, sent the annualized
inflation level to 1.25 percent.

"The price of several food commodities, including rice, fell
quite sharply in September," he said during a media conference.

Sugito said cumulative inflation for the first nine months of
the year was 0.02 percent, which is the lowest level of inflation
over the past 15 years.

Sugito said inflation for the entire year could end up at 2.5
percent, depending on domestic political developments.

He said riots during the upcoming presidential election could
effect the distribution system, causing prices to soar.

The central bank earlier projected inflation for 1999 would be
between 5 percent and 7 percent.

Indonesia suffered hyperinflation of more than 77 percent in
1998 as a result of the worsening economic crisis.

BPS said food prices in September, particularly for rice,
chili, onions, chicken, eggs and fish, were down by 3.81 percent
from their August levels.

It also said health care expenses dropped by 0.44 percent in
September.

However, BPS reported that the price of processed foods,
beverages, cigarettes and tobacco increased by 0.43 percent for
the month.

It added that prices in a number of other areas, including
housing, clothing, transportation, communications, education,
recreation and sports, also increased in September.

BPS said the highest level of inflation in September was the
1.09 percent experienced in the West Kalimantan capital of
Pontianak, while Ambon, the capital of Maluku, saw the largest
level of deflation at 3.69 percent.

Sugito said the agency had not been able to retrieve data from
the troubled province of East Timor.

"From now on, we'll no longer include East Timor in our
calculations," he said.

East Timor opted for independence from Indonesia in the recent
referendum on self-determination.

Commenting on the growth of the third quarter gross domestic
product (GDP), Sugito said: "We're still calculating it. But if
you look at sector development, the agricultural sector has been
very positive, as seen by the oversupply of food commodities.
Since the agricultural sector plays a dominant role in
calculating GDP, I think third quarter GDP growth will be higher
than the same period last year."

"I still can't give you a quantitative forecast. We still have
to wait and see what will happen with the presidential election,
and who will be the new members of the economic team," he said.

In the second quarter of this year, GDP grew by 1.82 percent
compared to the same period last year, the first positive
year-on-year growth since the economy contracted by 13.68 percent
last year.

BPS also reported that exports rose in August by 8.62 percent
to US$4.60 billion from $4.23 billion in July.

Sugito said the better export performance was in large part
the result of higher oil prices.

Oil and gas exports jumped to $1.02 billion in August from
$865.7 million in July as oil prices increased to around $20 per
barrel from $17.93 per barrel in July, Sugito said.

But BPS said that total exports during the January to August
period fell by 8.18 percent to $30.52 billion compared to the
same period in 1998.

BPS reported that non-oil and gas exports in August increased
by 6.44 percent to $3.58 billion compared to the same period the
previous year.

BPS said imports in August were at $2.01 billion, slightly
higher than the $2.0 billion in July.

It added that imports during the January to August period
declined by 13.23 percent to $15.56 billion from the same period
in 1998.

"I don't know whether imports will be higher in the coming
months because it largely depends on the exchange rate of the
rupiah to the U.S. dollar," Sugito said.

The rupiah recently tumbled to around 8,400 to the dollar from
around 6,500 in July. The fall is largely attributed to the Bank
Bali scandal and East Timor.

Sugito said future import performance could depend on the fate
of local importers who have vowed to stop importing from
Australia in the wake of deteriorating relations between the two
countries.

BPS said the import of consumer goods during the January to
July period jumped by 24.94 percent to $1.31 billion from the
same period last year.

It added that the import of raw materials during the same
period declined by 5.69 percent, while the import of capital
goods dropped by more than 51 percent.

"This means that there has been no new investment in the
economy," Sugito said.

BPS also reported that tourist arrivals to the country fell by
5.96 percent to 356,920 in August from July. (rei)