High housing costs raise inflation
High housing costs raise inflation
JAKARTA (JP): Higher housing prices in October brought the
country's inflation level close to 10 percent in the first 10
months of this year, causing concern to the government which just
raised electricity rates by 7.68 percent.
"The inflation, which fell from 0.89 percent in August to 0.53
percent in September, rose again to 0.89 percent last month,
bringing the cumulative inflation in the January-October period
to 8.27 percent," Minister of Information Harmoko told reporters
after a cabinet meeting at the Bina Graha presidential office
here yesterday.
"President Soeharto has ordered all government institutions to
improve coordination to curb rises in consumer prices so that
inflation will not reach 10 percent this year," the minister
said, adding that facilities for goods transportation, for
example, should be improved to expedite distribution.
Harmoko explained that last month's high inflation was caused
mainly by the average increase of 1.4 percent in housing prices
in the capitals of the country's 27 provinces. The prices of food
rose by 0.84 percent, clothing by 0.47 percent and other goods
and services by 0.44 percent.
The increases in housing costs were led by the surge of cement
prices in a number of provinces, where construction activities
increased during the prolonged dry season. Cement production and
imports could not meet the rising demand.
The minister acknowledged that the domestic cement producers
are not likely to be able to meet the rising demand until 1997,
when a number of companies will have substantially increased
their production capacities.
Yesterday's meeting, which was attended by Vice President Try
Sutrisno, economics ministers and senior economics sector
officials, also reported a 14.5 percent increase in the money
supply to Rp 42.4 trillion (US$19.4 billion) as of September from
Rp 37.03 trillion as of the end of last year.
Exports
Harmoko said Indonesia's exports slightly increased to $3.56
billion in August over $3.5 billion in the previous month.
However, because its imports rose to $2.72 billion from $2.68
billion, its trade surplus fell to $840.3 million from $884.6
million.
The August exports consisted of $2.71 billion in non-oil
products and $855.6 million in oil and gas, he said.
Cumulatively, the country's exports were recorded at $25.49
billion, of which $19.27 billion was contributed by non-oil
products and $6.22 billion by oil and gas, while its imports
reached $20.12 billion, he said.
"The country, therefore, gained a trade surplus of $5.36
billion in the January-August period," he said.
On tourism, Harmoko said that the number of tourist arrivals
in Indonesia during the first nine months of this year increased
by 18.2 percent to 2.45 million over the same period of last
year, with total foreign exchange spending of about $2.88
billion.
In September alone, the number of tourist arrivals increased
by 19 percent to 292,502, he said.
"We expect that the number of tourists visiting Indonesia this
year will reach four million, as compared to last year's 3.5
million," he said.
Harmoko said the meeting also discussed a plan to offer a 25
percent discount on telecommunication billing rates to
participants of and journalists covering the meetings of the Asia
Pacific Economic Cooperation (APEC) forum in Jakarta and Bogor,
beginning next week.
"A total of 5,184 hotel rooms in Jakarta have been prepared
for the participants and journalists, whose number will likely
reach 4,274," he said.
He said eight hotels in Jakarta will be used to accommodate
the heads of state taking part in the APEC Economic Leadership
Meeting. (riz)