High inflation rate

The inflation rate last month was considerably high and it is feared that we could end up with a two digit inflation rate by the turn of the year.

That is the reason why President Soeharto summoned a number of ministers recently, to see what they can do to stop the pace of inflation, which has reached 8.27 percent as of November.

The hike in electricity rates this month will contribute to a higher rate of inflation since it will be followed by price hikes in other sectors. Hence, the government's concern over the issue is understandable.

The second reason for a possible higher rate of inflation is the psychological state of the people. If the public has confidence in the measures to be taken by the government, the rate is likely to be lower.

Whatever happens, there is a need to think over whether we should fight for a single digit inflation at all costs. A 10 percent inflation rate, or even slightly over, is not necessarily bad.

Dramatizing the single digit inflation target is a wide spread phenomenon, as if it were a sacred thing. It will be very sad indeed if our efforts to achieve it involve manipulation of data.

-- Surabaya Post