High inflation rate

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