Inflation declined by 0.28 percent in May
Inflation declined by 0.28 percent in May
JAKARTA (JP): Indonesia's consumer prices declined by 0.28
percent in May, the country's third month of deflation in a row,
the Central Bureau of Statistics (BPS) reported on Tuesday.
BPS chief Sugito Suwito said that the consumer price index
declined to 204.76 in May from 205.34 in April, bringing the
year-on-year inflation (May 1998 - May 1999) to 30.73 percent.
"The negative monthly inflation rate was primarily caused by a
1.35 percent decline in the prices of basic food commodities," he
told a press conference.
He added that a 0.15 percent decline in the prices of
processed foods, beverages, cigarettes and tobacco, and a 1.03
percent drop in the prices of clothing had contributed to the
deflation.
"But the deflation rate is slowing particularly as prices of
other commodities, especially rice, have started to increase,"
Sugito said.
He added that prices in the housing, health, education,
recreation, sports, and telecommunications and transportation
sectors inflated in May.
Indonesia posted a deflation of 0.18 percent in March, and
0.68 percent in April.
Sugito said that the relatively peaceful campaigning by the 48
political parties ahead of the June 7 general election and the
undisturbed distribution sector had helped in preventing price
rises.
He added that the relatively stable exchange rate of the
rupiah against the U.S. dollar also contributed to the monthly
deflation.
Sugito, however, declined to confirm whether the government
inflation target of 10 percent by the end of the 1999/2000 fiscal
year in March would be attainable.
"There's still uncertainty surrounding the country's political
condition over the next six months," he said.
The government earlier projected an inflation target of 17
percent for the current fiscal year, but recently revised it to
10 percent following positive development in the country's
macroeconomic picture.
Some analysts said that the new inflation target was
realistic.
"I think it's a reasonable target," said Budi Hikmat, a senior
economist at PT Bahana Securities.
He added that the deflation in May was expected particularly
in view of the harvest season of food crops which traditionally
occurs in the first quarter of the year.
"Inflationary pressure in the first half will be relatively
nil, but we may have an inflationary problem in the second half,"
he said, pointing out higher demands resulting from year-end
Christmas and Millennium celebrations and a lower interest rate
environment.
"There may be a decline in industrial production due to the
Y2K problem," he said, citing the millennium bug computer
malfunction.
BPS also reported exports declined by 3.78 percent in April to
US$3.77 billion from $3.92 billion in March, with oil and gas
exports dropping by 0.60 percent and non-oil and gas exports
falling by 4.40 percent.
It said exports during the first four months of this year
dropped by 13.95 percent to $13.91 billion compared to the same
period in 1998.
"Exports of textiles, timber products, and electronics dropped
significantly," Sugito said.
BPS reported that imports in April were $1.80 billion, which
was 7.41 percent lower than the level in March.
It said imports in the first four months of this year sharply
dropped by 19.82 percent to $7.32 billion compared to the same
period last year.
It added, however, that the import of consumption products
from January to March jumped by 51.48 percent to $527.3 million
compared to the same period in 1998.
On the other hand, imports of raw materials during the same
period declined by 19.63 percent, and imports of capital goods
plunged by 51.33 percent, BPS said.
BPS said tourist arrivals in the first quarter of this year
increased by 5.22 percent to 1.25 million compared to the same
period last year despite the uncertainties in the country's
political and social condition.
But it said tourist arrivals in April dropped by 10.24 percent
to 305,814. (rei)