Indonesia records 0.04% deflation in September

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)