Tsunami pushes Aceh January inflation to 7.02 percent
Tsunami pushes Aceh January inflation to 7.02 percent
The Jakarta Post, Jakarta
The recent giant tsunami in Aceh have not only lifted boats onto
roofs but also the prices of basic foods in the area.
The food price increase propped-up January 2005's inflation
rate in its capital city of Banda Aceh to 7.02 percent, by far
higher than the nationwide inflation rate of 1.43 percent, as
revealed on Tuesday by the Central Statistics Agency (BPS).
With supply of foods lacking, "people in Aceh have been trying
to find substitutions to commodities unavailable at the moment
such as fish," BPS's Director of Price and Financial Statistics
Ali Rosidi told a press briefing.
He explained that the lacking of commonly consumed commodities
has risen the price of the substitutes, which in turn pushed up
the prices of other basic needs as well.
Aceh province is the hardest hit by the powerful earthquake-
triggered tsunamies struck the region on Dec. 26, rampaging the
area with death tolls reaching so far 109,000 as of Tuesday.
But, with relief supports pouring in to the area, which should
eventually secure basic foods supply, Ali was upbeat that the
raising inflation trend would only be temporary and that the rate
would soon return to normal.
Nation-wide, the 1.43 percent January inflation was largely
attributable to price hike in basic foods, housing and utilities
across the country.
"The highest increase of 3.11 percent was recorded for the
price of basic foods," said Ali. While prices of housing and
utilities rose by 1.48 percent.
On-year January inflation stood at 7.32 percent, exceeding the
2003's January's 4.82 percent.
In the past two years, this month's inflation was the highest,
raising concerns that full-year's accumulative inflation would
exceed the targeted rate of 6.5 to 7 percent.
A pick up in inflation will lead to the decreasing purchasing
power. This will then affect national consumer spending -- a
prerequisite to the robust domestic consumption, which has since
the crisis become the backbone of the nation's gross domestic
products (GDP) growth.
At present, domestic consumption makes up about 70 percent of
the GDP, with investment and net-exports contributing the rest.
High inflation would also give leeway for Bank Indonesia to
raise its benchmark interest rate (SBI), a bad sign for the
economy as it would prompt banks to adjust upward their lending
rates and make loans more expensive for the private sector.
January Inflation 2003 2004 2005
on month 0.80 0.57 1.43
on year 8.74 4.82 7.32
Source: BPS