Indonesia records 0.04% deflation in September

JAKARTA (JP): Indonesia, in a fight to stop inflation and boost exports, recorded 0.04 percent month-on-month deflation for September and a trade surplus of US$508.5 million for July.

Minister of Information Harmoko said after a routine monthly cabinet meeting chaired by President Soeharto yesterday that Indonesia, hampered by high inflation rates for years, has recorded monthly deflations three times this year.

He explained that a month-on-month deflation rate of minus 0.61 percent was reported in March, minus 0.07 percent in July and minus 0.04 percent in September.

"Bapak President said that if deflation could be reached in September, inflation rates in the coming months should also be contained," Harmoko said.

The minister said that Soeharto has instructed the State Logistics Agency to continue stocking basic needs, especially rice, flour, cooking oil and sugar, for November, December and January. During those months the weather is usually rainy and Indonesia sees a number of national festivities, including Christmas, New Year's, the Moslem fasting month and Idul Fitri.

He said deflation in September mostly came from a 0.8 percent fall in food prices. Meanwhile, housing prices rose 0.5 percent, clothing 0.31 percent and miscellaneous goods and services 0.1 percent,

Month-on-month inflation in August stood at 0.3 percent.

Deflation in September brought the cumulative inflation rate for the first nine months of 1996 to 4.9 percent, down from the 6.8 percent recorded for the same period of last year.

Speaking on international trade, Harmoko said Indonesia enjoyed a trade surplus of US$508.5 million in July, with exports totaling $4.1 billion and imports $3.6 billion.

When oil and gas were removed from the equation, exports in July totaled $3.2 billion and imports $3.3 billion, resulting in a deficit of $128.8 million, Harmoko said.

The country's trade surplus for the first seven months of 1996 stood at $2.7 billion with exports amounting to $27.5 billion, Harmoko said.

Indonesia's 10 leading export commodities, excluding wood products, continue to make strides. Exports of wood products declined 0.19 percent during the first seven months of this year over the same period of last year.

Over the same period, exports of textiles and textile-related products increased 6.31 percent, electronic products 12.72 percent, food and beverages 37.44 percent, steel, machinery and vehicles 47.45 percent and jewelry products 74.33 percent.

In a bid to boost more exports, President Soeharto instructed Minister of Industry and Trade Tunky Ariwibowo to educate people about international trade regulations, including the World Trade Organization. Soeharto also instructed his ministers to improve services to exporters.

"Bapak President gave special attention to government services and businesspeople because a number of them are not motivated and face difficulties improving their exports due to bureaucratic and licensing problems," Harmoko said. (rid)