Indonesia enjoys deflation again

JAKARTA (JP): Inflation for the month of July is expected to be negative, between 0.8 percent to 0.9 percent, amid weak demand and stable commodity prices, according to a source at the central bank.

"This is surprising because our earlier inflation forecast was between minus 0.3 to 0.4 percent," the source said.

The source said that demands remained weak as the banking sector had yet to resume lending, and the fiscal sector had yet to start significant spending.

The source also said that commodity prices remained relatively stable as farmers responded by planting more crops when prices soared last year.

Indonesia has enjoyed negative inflation for four months in a row since March.

Bank Indonesia Governor Sjahril Sabirin had earlier predicted that inflation would be negative again in July.

The Central Bureau of Statistics is scheduled to announce the July inflation figure and June trade figure on Monday. (rei)