Indonesia 2002 inflation seen down to 9.5 pct

Indonesia 2002 inflation seen down to 9.5 pct

Reuters, Jakarta

Indonesia's inflation is forecast to slow to 9.5 percent this year and 8.8 percent in 2003 as a firmer rupiah helps mitigate the impact of price hikes in basic necessities, a Reuters poll of 10 research houses showed.

"Inflation is forecast to fall...but it will still be high," said Raden Pardede, chief economist at local brokerage Danareksa Sekuritas.

The inflation rate was 12.55 percent in 2001.

Jakarta is expected to further raise prices of basic goods such as electricity this year, and implement more hikes in fuel prices in 2003, to cut costly budget subsidies.

As some of the basic goods had high imported components, a firm rupiah on the back of stable political conditions should help alleviate the inflationary impact of the price rises, economists said.

This year's budget has forecast inflation of 9.0 percent while the statistics bureau sees a rate at 9.5 percent, or 10.5 percent under the worst-case scenario.

The bureau forecast 8.5 percent inflation in 2003, or in the worst-case 9.8 percent or above.

Inflation in previous years (percent): 1997 +11.6 1998 +77.6 1999 +2.0 2000 +9.4 2001 +12.6 -------------------- 5-year average +22.6

Results of the survey are as follows:

2002 2003 Bahana Securities 11.0 9.0 Citibank 11.5 13.0 Credit Suisse First Boston 10.5 9.8 GK Goh Research 9.3 8.5 ING Barings Securities 7.2 6.2 Merrill Lynch 9.0 8.0 Standard Chartered 10.5 9.5 Danareksa Sekuritas 9.0 7.8 SG Securities 7.6 8.0 Nomura Securities 8.9 8.1 ------------------------------------------- Average 9.5 8.8