Inflation fell 0.27 percent in October

JAKARTA (JP): The monthly inflation rate dropped 0.27 percent in October this year, the first deflation recorded since the financial turmoil hit the country early last year, the Central Bureau of Statistics (BPS) reported on Monday.

The bureau's deputy chairman Kusmadi Saleh said a decline in food prices, especially rice, cooking oil, sugar and wheat, was the main reason for negative inflation during the month.

He said that the price of raw food products declined by 1.85 percent and that clothing prices fell by 1.89 percent in October.

"In raw food products, the main contributor to the decline was rice, which fell 0.58 percent and cooking oil, which was down 0.20 percent," Kusmadi said.

He said that processed foods, beverages, cigarettes and tobacco prices rose 0.61 percent, and that health products and services recorded the highest increase, rising 2.0 percent in the same month.

He said that housing prices rose 0.92 percent, education, recreation and sports 0.41 percent and transportation 0.26 percent over the same period.

Kusmadi said the drop in the price of rice, the nation's basic staple food, did not guarantee stable prices in the coming months.

"Deflation does not mean that prices are under control,' he said.

He said that the inflow of international rice aid and government imports was a contributory factor to the fall in the price of rice.

He said the rate of inflation had shown a declining trend over the past three months as a result of signs of improvement in the country's economy.

The consumer price index rose 3.75 percent in September, much less than the 6.30 percent rise recorded in the previous month.

"The rate of increase in the inflation rate is continuing to decline," he said.

The Indonesian government and the International Monetary Fund (IMF) expect inflation to be running at 80 percent over the 1998 calendar year.

But the accumulative inflation rate for the 10 months ending in October stands at 75 percent.

Indonesia booked an international trade surplus of US$1.85 billion in August, lower than the $2.2 billion recorded in July, the statistics office said.

Kusmadi said that the value of Indonesian exports reached a total of $4.03 billion in August, with non-oil and gas trade accounting for $3.42 billion and oil and gas exports making up the remaining $609.2 million.

Total exports for the eight month period ending in August declined slightly to $33.18 billion from $34.79 billion over the corresponding period last year.

He said that the country's imports totaled $2.18 billion in August, comprising of $211.8 million in oil and gas imports and $1.96 billion in non-oil and gas imports.

Total imports for the January-August period of this year were worth $17.92 billion, lower than the $28.33 billion recorded for the same period last year. (aly)