Coordination called for to curb inflation rate
Coordination called for to curb inflation rate
JAKARTA (JP): President Soeharto ordered his cabinet ministers yesterday to curb the inflation rate, which unexpectedly surged to its highest level of 1.6 percent last month.
"The President ordered ministers to improve coordination to enable them to affectively curb a further rise in the inflation rate in the coming months," Minister of Information Harmoko told reporters about the instruction made during the cabinet meeting.
Besides the inflation problem, the monthly meeting, which was attended by ministers dealing with economic, financial, trade and industrial affairs, discussed the latest developments in the country's economy, ranging from exports to the supplies of strategic products.
Harmoko said the surge in the inflation rate was caused by the increase in the prices of food and housing, which respectively grew by 1.34 percent and 2.31 percent.
"The rises in vegetable prices, for example, reached 5.40 percent, while those of foodstuffs is 5.26 percent," he said of the rising inflation rate.
The increase in the consumer price index reached its highest monthly level of 1.6 percent last month, as compared to 0.57 percent in March, 1.31 percent in February and 1.16 percent in January.
The surge brought the cumulative inflation rate in the January-April period to 4.75 percent, more than a half of the inflation rates recorded in each of the last previous years.
The annual inflation rate slightly dropped to 9.24 percent last year from 9.77 percent in 1993 and the government was confident that the rate would not break 10 percent in the current calender year.
Lending
The meeting also touched issues related to the requirement imposed on commercial banks to allocate at least 20 percent of their lending portfolios to small and medium-scale enterprises.
"President Soeharto asked the banking sector to fully abide by the 20 percent lending requirement in efforts to support the development of small and medium businesses in the country," said the minister of information.
According to Bank Indonesia (the central bank), most local banks have fully complied with the 20 percent mandatory lending. But analysts said many banks are still half-hearted as many of them, especially large banks, considered giving loans to small- scale businesses too costly and instead bought the lending portfolio of other banks in order to meet the requirement.
In yesterday's press briefing, the minister also reported on the country's trade balance.
He said that Indonesian exports totaled US$3.42 billion in February, while imports reached $2.98 billion, giving Indonesia a surplus of $440 million from its foreign trade activities.
The export revenues comprised of around $816.9 million from oil and gas and around $2.60 billion from non-oil products.
Harmoko said that there is no need for concern about the supplies of strategic commodities such as cement, fertilizer, cooking oil and steel despite the volatility in cement prices in the last three weeks.
"The cement stocks for May were, for example, sufficient to meet the projected domestic demand," he said, adding that the prices of cement in most parts of the country have started to decline and approach their reference prices.
In the tourism sector, the information minister said that the number of foreign tourist arrivals through the country's seven international gates reached 262,637 in March.
He said that the number of foreign tourists visiting the main tourist destinations was 97.2 percent of the government's minimal projection, or 91 percent of the maximum estimate.
In the January-March period, the total number of foreign arrivals reached 819,686, 101 percent of the minimal target or 95.3 percent of the maximum projection, he said, adding that the number was 8.35 percent higher than those registered in the same period of last year.
He said that foreign exchange revenues from foreign tourists during the January-March period totaled around $979.06 million.(hen)