Inflation reaches 12.55% in 2001, exports fall in November: BPS

The Jakarta Post, Jakarta

The 2001 inflation rate reached 12.55 percent, surpassing the government's initial target of between 9 percent and 11 percent, and higher than last year's rate of 9.35 percent, the Central Bureau of Statistics (BPS) said on Friday.

The inflation level however improved with 1.62 percent in December, as against 1.71 percent in November, BPS chief Soedarti Surbakti said.

In the state budget, the government had initially targeted an inflation rate of 9.6 percent, but recent developments in the world had forced the government and the House of Representatives, to revise key assumptions in the state budget including the inflation rate.

The lowest rate of 0.33 percent was experienced in January and the highest rate was experienced in July at 2.12 percent.

Deflation, Soedarti added, only occurred in August at 0.21 percent.

Food commodities, processed food, beverages, cigarettes and tobacco, housing, clothing, health care costs, education, recreations and sports, transportation and communications had been the largest contributors to inflation in 2001.

Prices for food commodities increased by 12.03 percent during the year, while the price of processed food, cigarettes and tobacco rose 14.48 percent.

The cost of housing, clothing and health care increased by 3.14, 0.73, 0.44 percent respectively. The cost of education, recreation and sports rose by 0.95 percent. The transportation and communication sectors also booked an increase of 1.6 percent.

Sudarti said of the 43 cities where inflation is measured, two experienced a decline in prices in December. The two were Manado and Denpasar.

Inflation in December slowed to 1.62 percent, as against 1.71 percent in the previous month, due to a slowdown in the increase of food prices from 4.8 percent in November to 2.92 percent in December. The slowdown in price increases occurred despite the religious festivities, including the fasting month of Ramadhan, Christmas and Idul Fitri holidays, which took place in December.

Economist Raden Pardede of the Danareksa Research Institute warned however that the slowdown in the inflation rate could only last briefly as prices could soar in the incoming months.

Raden told The Jakarta Post that inflationary pressure was expected to remain strong, particularly now that the government had decided to raise the prices of electricity and fuel and increase the minimum wage.

The government is planning to increase power rates by 6 percent per quarter and fuel prices by an average of 30 percent.

The high inflation will give more reason for Bank Indonesia to maintain its tight money policy, which is seen to have played a role in crippling the country's business sector badly in need of cash.

Exports fell by 14.7 percent to US$3.83 billion in November from $4.47 billion in October, and were much lower than the $5.24 billion posted in November 2000, in line with the declining trend of exports to the country's main export destinations Japan and the United States.

Non-oil and gas exports fell by 15.5 percent to $3.02 billion from $3.57 billion in October, and were down 23 percent from the $3.92 billion posted in November 2000.

The agency recorded a slight increase in imports, with $2.03 billion in November as against $2.01 billion in October, but the figure was down from the $3.57 billion posted in the same month a year earlier.

Non-oil and gas imports rose 2.6 percent to $1.67 billion from $1.63 billion in October, but declined 44 percent from the $2.96 billion recorded in November 2000, the bureau said.

This has resulted in a reduction in the country's trade surplus from $2.46 billion in October to $1.80 billion in November.

The global economic downturn was cited by the bureau as being behind the slump in exports.

"It began even before the attacks on the World Trade Center and the Pentagon. The U.S. and Japan had been experiencing an economic slowdown," it said.

Tourist arrivals through the 13 main points of entry fell by 2.36 percent to 304,000 in November compared to the previous month's figure of 311,000 arrivals.

From January to November, the number of tourists was recorded at 3.88 million, a 1.85 percent increase from those arriving during the same period last year.