Inflation in April increases 0.15%

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, cost of housing rose by
0.16 percent, health costs edged up 0.32 percent and education
and recreation costs were up 0.22 percent.

Costs related to transportation and communications were also
up 1.31 percent on month, pushed higher by a 6 percent rise in
electricity costs at the start of April, the bureau added.

The government plans to raise electricity prices by this
amount at the start of each quarter in 2003 to help reduce its
large debt levels.