Wed, 05 Apr 2000

Inflation down 0.45% in March amid food price fall

JAKARTA (JP): Inflation fell by 0.45 percent in March compared to the previous month on the back of falling prices of food and processed food commodities, according to the Central Bureau of Statistics (BPS).

BPS Chairman Sugito Suwito said on Monday that year-on-year inflation fell 1.1 percent during the month compared to the same period last year.

"The deflation was caused by falling prices of food and processed food products," Sugito told a press conference.

He pointed out that prices of basic food commodities including rice, red pepper, vegetables and chicken fell by 2.28 percent, while prices of processed food, beverages, and cigarettes by 0.09 percent.

The price of rice dropped significantly last month due to the start of the harvest period.

But Sugito said other prices increased last month, including housing cost by 0.42 percent, clothing 0.12 percent, health cost 0.26 percent, education 0.94 percent, and transport and communications by 0.3 percent.

Sugito expected inflation this month to remain low because the government had delayed the planned increase in fuel prices.

He said that although the government increased the electricity tariff this month, the impact on inflation would be felt in the following months.

"It's still possible to see another deflation this month," he said.

President Abdurrahman Wahid decided to postpone the planned 12 percent increase in fuel prices last week amid protests and concerns over possible abuse in fuel subsidies for the poor and public transportation.

The government planned to provide subsidies for poor families to purchase kerosene and for the public transportation firms to purchase gasoline and automotive diesel fuel.

The Central Bank has said that inflation for this year would range between 5-7 percent if the government realized its plans to raise fuel and electricity prices.

Sugito, however, admitted inflation in April would not be as low as the March level, particularly after the government already raised civil servant salaries by 30 percent late last week and hiked the electricity tariff also by 30 percent.


BPS reported that exports rose 5.49 percent in February to US$4.61 billion from $4.37 billion in January.

But the agency said that the exports jumped by 44.7 percent when compared to $3.19 billion during the same month last year.

BPS said that imports in February declined by 2.3 percent to $2.08 billion from the level in the previous month.

BPS said that this led to a 13 percent increase in trade surplus to $2.53 billion from the level in January.

Sugito said that the jump in exports were particularly driven by higher non-oil and gas exports, raising a fresh hopes that the economy would fully recover within the next few months after suffering a major setback due to the crisis.

He said that non-oil and gas exports rose to $3.51 billion in February from $3.24 billion in the previous month and $2.62 billion in the same period in 1999.

He also said that non-oil and gas imports including raw materials for manufacturing sector increased slightly to $1.73 billion from $1.72 billion in the previous month, while oil and gas imports declined by 13 percent to $350 million. (rei)