Year-on-year inflation at 8.33% in August

The Jakarta Post, Jakarta

Inflation in the country continued its upward trend as a new academic year pushed educational costs higher, while public expenditure for food and household items are also on the rise, figures from the Central Statistics Agency (BPS) show.

The country's Consumer Price Index (CPI), which measures inflation, increased by 0.55 percent in August from July, or 8.33 percent higher than their levels in August last year, the BPS reported on Thursday.

"The price increase occurred across the board, towards almost every commodity," BPS head Choiril Maksum said.

Choiril however noted that last month's inflation was mostly due to the new academic year starting in July, which had pushed all school-related expenses up.

Indeed, education, recreation and sports costs -- which contributed an estimated 0.2 percent to August's inflation -- increased the highest by 3.29 percent, led by a surge in school book prices and entry feees.

The public also spent more last month on housing, water, electricity and fuel, whose prices rose by 0.51 percent, and contributed to 0.15 percent of the monthly inflation.

Rising by as much, but only contributing 0.09 percent to the month's inflation, were the prices of processed food, beverages, and tobacco products.

The government had raised cigarette retail prices by 15 percent in July, with their impact on inflation showing during the month and appearing to continue into August, Choiril said.

The rising of staple food prices due to an ongoing dry season, which had contributed the most to July's inflation, eased down to an increase of only 0.14 percent in August.

Similarly easing down, were transportation, communication, and services costs, which only rose by 0.09 percent.

Transportation costs had previously shot up, pushing on-year inflation to a year high of 8.81 percent, after the government hiked domestic fuel prices by an average of 29 percent in March.

Public expenditure for health services and clothing, meanwhile, rose by 0.47 percent and 0.43 percent, respectively, but only contributed to 0.03 percent and 0.02 percent of August's inflation.

Choiril refused to comment on the inflation forecast until the year's end, in the recent situation of soaring oil prices, a weakening rupiah, rising interest rates, and the government likely to hike fuel prices again to cope with the situation.

"It will depend on how all those factors balance, regarding their impact on the inflation rate," he said.

He said, however, that data from previous years showed that inflation usually continued to rise during the year's final three last months of October, November and December.

Choiril also said that another 30 percent hike in the prices of premium gasoline, diesel fuel, and kerosene could affect inflation by as much as 0.01 percent to 0.56 percent.