Inflation higher in April on rising food prices: BPS
The Jakarta Post, Jakarta
The consumer price index (CPI) rose by 0.97 percent in April from the level in March as prices of goods and services increased during the month, the Central Statistics Agency (BPS) reported on Tuesday.
BPS said that year-on-year inflation in April (inflation in April 2004 compared to inflation in April 2003) increased to 5.92 percent from on-year inflation of 5.11 percent in March.
Despite the higher inflation, most analysts are still optimistic that full-year inflation rate would be lower than the government's target of 6.5 percent this year.
This should pave the way for the central bank to further cut the domestic interest rate to make bank loans more affordable to the corporate sector.
Indeed, the benchmark interest rate on Bank Indonesia one- month SBI promissory notes has now gone down to a record low of 7.33 percent. But central bank officials have said that the benchmark rate could go down to the 6 percent level before the end of the year.
BPS said that price increases in almost all categories of foods and services: basic foods (prices increased by 1.78 percent), processed food, beverages, cigarette and tobacco (0.32 percent), housing, water, electricity, gas and fuel (1.23 percent), clothing (0.24 percent), and transport, communications and financial services (0.44 percent), all contributed to the increased inflation rate.
It did not explain the reason for the higher prices in the above components.
BPS said that the largest contributor to the April inflation was basic foods, in which the price of poultry and chicken products saw the largest price increase.
This may have something to do with decreasing fears about bird flu, as people are now less reluctant to eat chicken.
Meanwhile, the increase in phone charges starting earlier last month also contributed to the higher prices in telecommunication services.
Steps taken by the authorities to limit sugar imports and curb the smuggling of sugar into the country to protect local farmers had also put upward pressure on sugar prices at home.
Analysts also said that the weakening of the rupiah against the U.S. dollar in April had made hiked the cost imported materials, putting pressure on prices at home.
The country's production system is still heavily dependent on imported raw materials.
Exports up 3.43%
The country's exports increased by 3.43 percent in March to US$5.07 billion from $4.90 billion in February, the Central Statistics Agency (BPS) reported on Tuesday.
The agency said that the increase was driven by higher exports of oil and gas commodities and non-oil and gas products.
But BPS said that exports in the first quarter of this year (January to March) slightly declined by 0.89 percent from the same period last year mainly on lower oil and gas export value.
Oil and gas exports in March bounced back to $1.19 billion compared to February's $1.13 billion due to a 9.94 percent and 3.49 percent increase in exports of crude oil and natural gas, respectively.
Non-oil and gas exports during the month recorded a 2.86 percent increase from $3.76 billion to $3.87 billion.
The government has set a total export target of $59.4 billion for this year.
Elsewhere, BPS said that imports in March rose 8.3 percent to $3.13 billion from $2.89 billion in February. The import figure jumped by 11 percent from $2.82 billion in March of last year.
The higher import caused the country's trade surplus for the month to fall to $1.94 billion from $2.01 billion in February.
Some analysts have said that the higher import figure could signal more active business activities. -- JP