March inflation up, exports down
JAKARTA (JP): Inflation in March rose 0.89 percent following a 0.87 percent increase in February, as the government's announcement that it would raise fuel prices beginning this month propelled consumer price indexes in all categories, the Central Bureau of Statistics (BPS) said on Monday.
BPS deputy Kusmadi Saleh said the March inflation rate was expected to drop because holidays in the previous months had been pressuring the consumer price index.
"March's high inflation rate was unexpected ... it should have dropped, but it didn't," Kusmadi said in a monthly press briefing.
He said the surprising jump in inflation in March was likely to propel this year's inflation rate beyond the government's target of between 7 percent and 9 percent.
Since January, inflation has hit 2.11 percent, the BPS monthly report said. The year-on-year rate now stands at 10.62 percent.
All consumption categories recorded increases in their price indexes in March, BPS said.
The biggest contributors to March's inflation were the housing price index with a 0.28 percent increase, followed by beverages, cigarettes and tobacco at 0.22 percent and raw food at 0.2 percent.
Kusmadi blamed March's high inflation rate on the government's announcement during the month that it would raise fuel prices by an average of 20 percent beginning in April.
He said that even though the government postponed the fuel price hike for the public, the announcement was enough to increase consumer prices indexes.
The government delayed the fuel price hike for the public until October, though it went ahead with the fuel price increase for industries.
Kusmadi warned that the decision to impose higher fuel prices on industries could push inflation 0.5 percent to 1 percent above the government's target.
BPS said earlier it expected an impact of only 0.4 percent to 0.8 percent on inflation, assuming an average 20 percent increase in fuel prices in April.
But the government imposed higher fuel prices on industries than originally planned. Beginning in April, industries must purchase fuel at prices that are 50 percent higher than prices on the international market. This pricing scheme sends fuel prices for industries soaring by an average of 108 percent.
"We must wait until April passes before we can get a clearer picture of the impact of the higher fuel prices," Kusmadi added.
Exports
Meanwhile, exports continued to weaken, dropping to US$4.72 billion in February from $4.84 billion the previous month, according to the BPS report.
"Since September 2000, monthly exports have been steadily falling," the report said.
It said Indonesia's export earnings in February fell 2.42 percent from January, and oil and gas exports decreased 16.75 percent.
The bureau attributed a seasonal drop in oil and gas demand for the lower export revenue of $1.11 billion, compared to $1.34 billion the previous month.
"On the other hand, non-oil and gas exports rose by 3.06 percent in February," BPS said. Non-oil and gas exports grew to $3.61 billion in February from $3.50 billion the previous month.
Despite an economic slowdown in the United States, non-oil and gas exports to that market rose by $87.7 million. This was followed by China with a $33.6 million increase and Germany with $12.5 million.
Non-oil and gas exports to the U.S., Germany and China in February totaled $633.5 million, $116.1 million and $129.3 million, respectively.
Non-oil and gas exports to Singapore in February recorded the biggest drop, falling by $96.4 million to $386.7 million.
Imports for February dropped slightly by 0.18 percent to $3.02 billion, from $3.03 billion the previous month. This continues the three-month trend of falling imports, mainly due to the stronger U.S. dollar.
The rupiah has been falling since May last year, when it broke the 8,500 level against the greenback, but imports remained strong until December last year.
Indonesia's trade surplus in February fell to $1.70 billion from $1.81 billion the previous month. (bkm)