Inflation in April increases 0.15%

A'an Suryana The Jakarta Post Jakarta

The Central Bureau of Statistics (BPS) said on Thursday that inflation in April was higher due to the rising price of sugar and electricity.

BPS said that inflation as measured in the consumer price index rose by 0.15 percent during April from the previous month, but increased by 7.4 percent if compared to April 2002.

Analysts said that the higher inflation would not pose a threat to the government's target of 9 percent this year as prices were likely to remain in control on the back of a stable exchange rate of the rupiah to the U.S. dollar.

This will provide more room for Bank Indonesia to continue to lower its benchmark interest rate. The interest rate on Bank Indonesia one-month SBI promissory notes fell again on Wednesday to 11.06 percent. The lower interest rate environment is crucial to help push bank loans and ease pressure on the state budget to service the government's domestic debt whose interest rate is linked to the SBI rate.

BPS said that the higher price of sugar and electricity had driven up the price of key commodities, such as processed foods, beverages, cigarettes and the cost of housing.

It said that the price of processed food, beverages and cigarettes increased by 1.41 percent, while the cost of housing rose by 0.16 percent.