Fri, 03 Jan 2003

Electricity hike pushes 2002 inflation up

The Jakarta Post, Jakarta

Inflation in 2002 reached 10.03 percent, up from the government's single digit target of 9 percent, the Central Statistics Agency (BPS) said on Thursday.

BPS said that the quarterly increase in electricity rates during the year had been the primary contributor of the higher inflation.

"During the last 12 months the most dominant factor behind inflation was electricity rates," BPS chief Sudarti Soerbakti said.

There is rising concern that the simultaneous increases in the price of fuel products and electricity rates earlier this month would complicate efforts to limit inflation this year. This may mean the central bank would be unlikely to cut interest rates in the near term.

Minister of Finance Boediono had dismissed such fears, saying that the government would move to avoid a sharp increase in food prices. The food and beverages sector is a major component in the consumer price index basket.

BPS said that inflation in December rose 1.2 percent from November due to price increases during the year-end festivities.

In December, basic food prices were up 2.42 percent from November, while prices of processed food and cigarettes gained 1.01 percent. Housing costs rose 1.05 percent, clothing prices edged up 0.59 percent, health care costs increased by 0.27 percent, and education and recreation costs rose 0.11 percent.

Transportation and communications costs inched up 0.65 percent from a month earlier.