Indonesian exports recover but inflation increases

JAKARTA (JP): A cabinet meeting yesterday reported a recovery in the country's exports but warned there could be an increase in inflation.

"The country's exports in March increased for the first time this year after declining in the previous months," Minister of Information Harmoko told reporters after a limited cabinet meeting at the Bina Graha presidential office here yesterday.

He explained that monthly exports, which declined in January and February from their levels in the same months of last year, increased by six percent to slightly over US$3 billion in March.

Because its imports reached only $2.51 billion in March, Indonesia enjoyed a trade surplus of $490.8 million in the month, he said.

Harmoko said March's exports brought Indonesia's total foreign exchange revenues from this sector to $36.39 billion during the 1993-94 fiscal year, while its imports were recorded at $28.85 billion.

In 1992-93, the country's exports increased by 18.8 percent to $35.3 billion from $29.71 billion.

Harmoko said President Soeharto, who presided over the meeting, warned that all government institutions should improve efforts to curb price increases because hikes in food prices raised inflation in May.

Spurred by substantial increases in food prices, inflation, which dropped to this year's low of 0.24 percent in March, rose back to 0.52 percent last month.

The minister said food prices in the capitals of the country's 27 provinces increased by an average of 1.05 percent in May due mainly to the increases of fat and oil prices by 5,9 percent, ingredients by 4.6 percent and vegetables by 1.9 percent.

"The President instructed Coordinating Minister for Industry and Trade Hartarto to coordinate the Ministry of Agriculture, the Ministry of Transportation, the National Agency of Logistics and other institutions concerned in improving the velocity of food supplies and distribution throughout the country," he said.

May's inflation brought the consumer price index to 4.47 percent.

The government, under its Sixth Five Year Development Plan (Repelita VI), plans to curb increases in the prices of consumer goods at a maximum of five percent per annum.

Harmoko said the meeting also reported that the country's money supply, which fell by almost four percent to Rp 38.45 trillion ($17.9 billion) in March from Rp 40.04 trillion in February, slightly increased to Rp 38.54 trillion in April. (riz)