Govt expects lower inflation

JAKARTA (JP): Indonesia is expected to post another deflation in September on the back of an oversupply of food commodities, the chief of the Central Bureau of Statistics (BPS), Sugito Suwito, said.

"We expect deflation of between 0.5 percent and 0.9 percent in September," he told reporters on the sidelines of a seminar.

Sugito said that food prices continued to decline during the month.

But he said that he had yet to calculate the full impact of recent mass student demonstrations in Jakarta, which has caused the rupiah to tumble, making imports more expensive.

Imported raw materials are a major component of the country's production system.

"But I think the demonstration has not disturbed food distribution because it was only in Jakarta," Sugito said.

Indonesia has reported deflation since March after hyperinflation of more than 77 percent in 1998.

Deflation in August was 0.93 percent, sending the annual inflation level during the month to 5.77 percent, which was slightly lower than the government's target of six percent for 1999. (rei)