Inflation still rising, peaking at 18.33 percent
Inflation still rising, peaking at 18.33 percent
Urip Hudiono, The Jakarta Post/Jakarta
Inflation maintained its steady climb last month as the October
fuel price increases continued to affect prices across the board.
Year-on-year inflation in November was 18.38 percent, up from
the October on-year inflation rate of 17.89 percent.
The Central Statistics Agency (BPS) reported on Thursday that
inflation, as measured by the Consumer Price Index (CPI) as of
November, stood at 17.17 percent for the year.
Monthly inflation in November, meanwhile, has eased down to
1.31 percent from its 8.7 percent spike in October.
"Inflation in November was due to an across-the-board rise in
the prices of goods and services throughout the country,
particularly on staple foods," BPS chief Choiril Maksum said.
"We are still monitoring the impact of the recent fuel price
hikes on the inflation rate, particularly a second-round effect
on the staple food prices, although its effect on transportation
costs has eased."
Inflation skyrocketed in October to a month-on-month level of
8.7 percent and 17.89 percent on-year, after the government more
than doubled the average price of fuel on the first day of the
month.
It was the second time this year the government raised fuel
prices, after introducing an average price increase of 29.9
percent on March 1, in an effort to rein in the massive fuel
subsidy amid soaring global oil prices.
Choiril said higher food prices accounted for much of
November's monthly inflation, with staple food prices rising 2.47
percent (accounting for 0.62 percent of the monthly inflation
rate) and prices of processed foods, beverages, cigarettes and
tobacco going up 2.06 percent (0.36 percent).
"The price of rice alone, for example, contributed 0.9 percent
to monthly inflation, while a standard rice meal (a plate of rice
and side dishes) contributed 0.16 percent," he said.
Public spending for housing, water, electricity and fuel rose
by 0.64 percent, while transportation, communication and
financial services costs eased 0.53 percent.
BPS' monthly inflation report summarizes the agency's month-
long survey of 35 commodity prices in 45 major cities throughout
the country, recording the movement of the prices as compared to
their prices in 2002 as its 100-point CPI base.
Rising inflation, coupled with the central bank's policy of
raising interest rates to maintain macroeconomic stability, could
put in danger economic growth. The government has targeted 6
percent growth for 2005, but as of the third quarter the economy
had expanded by 5.34 percent, down from 6.12 percent in the first
quarter and 5.84 percent at the end of the second quarter.
With inflation in November rising to a six-year high, it could
spell doom for the government's optimistic assessment that
October's fuel-price-hike-triggered inflation was a one-time
surge.
Though the government promised to stave off further rises in
the prices of basic commodities through better distribution and
market operations, BPS reported the only food prices that went
down in November were cooking oil and sugar -- and those only by
0.01 percent.
The government has set an 8.6 percent inflation target for
2005. Bank Indonesia estimates full-year inflation will be around
17 percent and will remain in double digits at least until the
second quarter of next year, before returning to single digits by
the end of 2006.