JP/13/Boedi
JP/13/Boedi
Govt won't revise inflation target despite price hikes
The Jakarta Post
Jakarta
The government's 6.5 percent inflation target for this year
would still be attainable despite hikes in the prices of
liquefied petroleum gas (LPG) and local telephone rates, Minister
of Finance Boediono said.
"A hike in one or two commodities will not necessarily trigger
price hikes in other commodities. In fact, the price of other
commodities or services may go down," Boediono said at a seminar
on the economy.
He said the government would press ahead with several key
economic reform programs to help maintain the current hard-gained
economic stability, including inflation. He did not elaborate
what these programs were.
State oil and gas firm PT Pertamina last month raised the
price of LPG by 5.3 percent to Rp 3,000 (35 U.S. cents) per
kilogram to cover rising production costs. The company has said
it would raise the price again later this year in order to break
even.
Meanwhile, state telecommunications company PT Telkom raised
its local phone rates on Thursday by more than 28 percent, but
cut down long-distance call rate by 20 percent.
The Central Statistics Agency (BPS) announced on Thursday on-
year inflation in March increased by 0.36 percent as prices of
foods and other commodities increased during the general election
campaign period. Year-on-year inflation during the month was
recorded at 5.11 percent, higher than 4.6 percent posted in
February.
Inflation during the first three months of the year reached
0.99 percent, BPS said.
The 2004 state budget assumes an inflation rate of 6.5 percent
for the full year.
The economy has enjoyed a relatively benign inflation rate
during the past few years after suffering from hyperinflation
during the late 1990s in the wake of the economic crisis.
The weak inflation environment has allowed the central bank to
cut domestic interest rates, ease the burden of the government in
servicing its huge domestic debts, and improve the people's
purchasing power. Domestic consumption has been the main engine
of the country's economic growth during the past couple of years.