June inflation remains in double digits
JAKARTA (JP): Inflation, as measured by the consumer price index (CPI), increased to 1.67 percent from the previous month's level and was higher at 12.11 percent on a year-on-year basis, the Central Bureau of Statistics (BPS) reported on Monday.
BPS chief Soedarti Surbakti told a press conference that the higher inflation rate was caused largely by the recent 30 percent hike in fuel prices.
However, the inflationary impact of the rupiah's weakness was insignificant as the local unit was relatively stable (at around Rp 11,300) against the U.S. dollar during the month.
The BPS said that transportation and communications costs rose by 3.4 percent; processed food, beverages, cigarettes and tobacco 2.38 percent; housing 1.61 percent; and unprocessed food 1.35 percent.
Cumulative inflation from January to June reached 5.46 percent, the BPS said.
"The double digit inflation which has taken hold over the past few months will likely continue until the end of the year," Soedarti said.
The government has set the inflation target for 2001 at 9.3 percent. But many analysts foresee inflation this year as exceeding the government's estimate due to the electricity rate hike this month and the weakening rupiah.
Strong inflationary pressure may force Bank Indonesia to maintain its tight monetary policy by keeping its benchmark interest rate at above 16 percent.
The interest rate on Bank Indonesia one-month SBI promissory notes is currently 16.65 percent.
But economists warned that high interest rates would exacerbate the problems of the ailing banking industry, and increase the burden on the state budget in covering the interest costs of the government's bank recapitalization bonds.
The BPS also reported that exports rose by 0.7 percent in May to US$4.85 billion from the previous month due mainly to an increase in oil and gas exports.
Cumulative exports from January to May totaled $24.53 billion or an increase of 2.17 percent compared to the same period in 2000.
The rise in international oil prices from $26.83 percent in April to $27.85 per barrel in May was responsible for the larger oil export revenues.
Non-oil and gas exports in May, however, suffered a decline of 0.51 percent to $3.72 billion from $3.74 billion in April, BPS said.
Contrary to economists' predictions of smaller exports to the U.S. due to its economic slow-down, Indonesia's non-oil and gas exports to that country actually rose slightly by $69.4 million to $665.1 million in May.
Non-oil and gas exports to Japan, Germany, Taiwan, South Korea and Australia were also up by $34.3 million, $22.5 million, $13 million, $10 million and $4.5 million, respectively.
However, non-oil and gas exports to Singapore, China, and Malaysia fell by $64.5 million, $28.5 million and 13.8 million, respectively.
Among non-oil commodities, machinery exports suffered the largest decrease of $48.2 million to $175.4 million.
Meanwhile, imports in May fell by 2.98 percent to $2.84 billion compared to the previous month due to lower non-oil and gas imports, the BPS added.
Cumulative imports from January to May, however, increased 32.92 percent to $14.99 billion from $11.28 billion in the corresponding period last year.
Non-oil and gas imports in May 2001 declined by 6.38 percent to $2.44 billion from April, but cumulatively they increased 43.56 percent to $13.06 billion compared to the first five months last year.
The largest group among non-oil and gas imports between January and May 2001 was machinery and engines at $2.14 billion, or 16.39 percent of the total non-oil and gas imports.
Imports of consumer goods increased 30.15 percent between January and April reaching $872.5 million. (tnt)