Inflation rate surged to 77.63 percent last year

JAKARTA (JP): Indonesia recorded an inflation rate of 1.42 percent in December from 0.08 percent in November, sending the 1998 full-year inflation rate to 77.63 percent, the Central Bureau of Statistics (BPS) announced Thursday.

The inflation rate in 1998 was still lower than the 80 percent targeted by the government but it was far higher than the 11.05 percent recorded in 1997.

BPS chief Sugito Suwito said the increase in prices was particularly significant during the last two weeks of the month as household demands soared in anticipation of the Ramadhan fasting month, Christmas and New Year celebrations.

"The major contributors to inflation were increases in food and clothing prices," he said.

Sugito said the December inflation was still lower than the 2.04 percent level in December 1997.

Inflation for the nine months of the 1998/1999 fiscal year starting from April was 39.74 percent.

Exports in October totaled US$3.78 billion which was lower than $4.01 billion in September, sending the January to October export revenue to $41.03 billion, a 6.9 percent decline from the same period in 1997.

This decline was caused by lower international prices for the country's major export commodities including oil.

Sugito estimated total export revenue in 1998 would reach $50.05 billion, a 6.34 percent decline from 1997, comprising $7.73 billion in oil and gas exports and $42.32 billion from non- oil and gas exports.

Imports in October reached $2.40 billion, up from $2.23 billion in September, sending the January-October cumulative figure to $22.59 billion, a 36 percent decline from the level in the same period in 1997.

The agency estimated imports for the full year 1998 at $27.43 billion, a 34.2 percent decline from the level in 1997.

Sugito that Indonesia's gross domestic product (GDP) for 1998 (based on the 1993 constant prices) dropped to Rp 374.7 trillion from Rp 434.1 trillion in 1997.

"The economy will have shrunk by an estimated 13.68 percent," he said. This is close to the IMF estimate of 13.80 percent.

The 1998 per capita GDP based on 1993 constant price declined to Rp 1.8 million from Rp 2.2 million in 1997, Sugito said.

BPS said that almost all sectors of the economy suffered a negative growth in 1998, except the agriculture, electricity, gas and drinking water sectors.

Sugito forecast that GDP in 1999 could grow by between 1.5 and 2 percent if the political activity during the year does not disrupt the production system.

"The political agenda in 1999 is heart-pounding. There's a general election and a presidential election," he said, adding that if these activities disrupted the production system, the economy could shrink by 2 percent.

He added, however, that developments during the past three months were encouraging as the rupiah managed to stabilize despite widespread riots and demonstrations.

"If this kind of phenomenon can be maintained next year, inflation may reach 15 percent, but otherwise it may go up to 20 percent," he said. (rei)