Inflation 0.08% in November: BPS

JAKARTA (JP): Indonesia's monthly inflation rate rose to 0.08 percent in November from deflation of 0.27 percent in October, sending the year-on-year inflation rate to 78.15 percent, the Central Bureau of Statistics (BPS) announced on Monday.

BPS deputy chairman Kusmadi Saleh attributed the slight inflation to rising prices of processed food, beverages, cigarettes and tobacco by 0.69 percent.

He said that a 1.02 percent increase in the health index and 0.48 percent rise in the housing index contributed to the inflation.

He, however, added that a 0.18 percent decline in prices of raw foodstuffs helped to limit inflation despite rising political tension during the month.

The government expects the inflation level for the whole of 1998 to be 80 percent.

"Prices of several commodities in the food category continued to decline," Kusmadi told reporters at a media conference.

He said the average price of rice declined 0.23 percent, gold and jewelry 0.21 percent, and cooking oil, sugar, fresh fish and chicken meat 0.12 percent.

"Despite the social and political unrest during the second half of November, the average price of rice in the month was relatively lower than the average in October," Kusmadi added.

He said inflation for January to November was 75.14 percent, while for the first eight months of the fiscal year from April to November was 37.78 percent.

Asked whether the government target of 80 percent inflation throughout the year could be achieved, he said: "It all depends on what happens in December. Bad things beyond our control can always occur."

He pointed to food production and distribution which could be disrupted by continuing political and social unrest.

Another worrying factor was the ability of the government to provide the necessary imports for the production of agriculture products, he added.

He explained that based on the empirical data collated over the past 10 years, inflation in December was always higher than in November .

"I'm certain that inflation in December will be higher, even though the political and social situation is improving," he said, citing the higher demand for goods due to the Christmas and New Year celebrations and the Moslem fasting month.

Inflation in December 1997 was 2.04 percent compared to 1.65 percent in November.

Kusmadi also said that the government target of 10 percent inflation 1999 would be achievable as long as political and social stability could be maintained.

He was less optimistic, however, about the government's positive Gross Domestic Product growth projection for next year.

"I think it's too optimistic. The most likely figure will be a contraction of 2 percent," he said.

He said that his forecast on 1998 GDP was a contraction of 13.54 percent, compared to the government estimate of 15 percent negative growth.

BPS also announced a trade surplus of US$1.78 billion in September, resulting from exports of $3.99 billion against imports of $2.22 billion.

Oil and gas exports were $642.8 million, while non-oil and gas exports were $3.36 billion.

Total exports during the January-September 1998 period were $37.24 billion, a 5.73 percent decline from the same period in 1997 due to a 31.44 percent drop in the value of oil and gas exports. Non-oil and gas exports, however, rose slightly by 1.51 percent, Kusmadi said.

"The drop in the oil and gas exports is beyond our control," said BPS senior official Rusman Heriawan, citing the slump in the oil price from $18 per barrel to $12 per barrel due to oversupply.

"The oil export volume dropped only 5.79 percent, but the value plunged by 31.4 percent," he added.

BPS reported that imports during January-September 1998 were $20.15 billion, a 36.60 percent decline from the level in the same period last year.

Kusmadi said the decline resulted from a 29.31 percent fall in oil and gas imports and a 37.35 percent drop in non-oil and gas imports. (rei)