This year's inflation may reach double-digit

This year's inflation may reach double-digit

JAKARTA (JP): The country's inflation rate will most likely
reach the double-digit level this year if the government goes
ahead with its plan to raise electricity billing rates next
month, economist Sjahrir says.

"The new electricity tariffs will trigger a cost-push
inflation to reach a double-digit figure," Sjahrir told reporters
before addressing a seminar here yesterday.

The government, under the Soeharto administration, has been
successful in controlling inflation at less than 10 percent per
annum for more than 20 years and has pledged to check it at about
five percent annually in the coming five years.

However, the inflation rate reached 7.38 percent in the first
nine months of this year.

The government confirmed on Wednesday that electricity billing
rates will rise by around three percent next month. The Minister
of Mines and Energy I.B. Sudjana is scheduled to hold a press
conference about the government's decision on electricity tariffs
this afternoon.

Sudjana said on Wednesday that the government plans to adjust
electricity tariffs every three months in line with the
developments in fuel prices, the depreciation of the rupiah and
the country's rate inflation.

Sjahrir said yesterday that the rise in electricity tariffs
indirectly affects the prices of other goods and services such as
housing.

The economist, however, praised the government's decision to
adjust electricity tariffs at a gradual rate every three months.

"That way will shock the public much less than one high hike,"
he said.

He also warned that if his prediction on the inflation figure
proved accurate, he feared that a rush on the dollar might take
place. (hdj)