Agus Martowardojo: Inflation Rate to be Kept under Control

(News Today) - Finance Minister Agus Martowardojo said the government would try to keep this year’s inflation rate at its projected level of 5.3 percent although there was a possibility it would turn out higher due to increased consumption.

"Now the rate has already reached 2.42 percent , so we must indeed be alert," he said at his office here on Tuesday.

He said it was possible for the rate to rise in the coming months but the government would strive to ensure smooth goods distribution to avoid scarcities in anticipation of recent electricity price hike, the school and religious holidays and the payment of the 13th salary to civil servants.

"We believe distribution will be well maintained. There must be no obstacles. We are anticipating the impact of the electricity price hike on inflation although it will not be big. We are also anticipating the new school year, school fees and later the post-fasting holidays. We are anticipating these all these things but we are sure the rate of inflation will remain under control," he said.

He stated government officials under the coordinating minister for economic affairs, such as the trade minister, agriculture minister and head of the National Logistics Agency would keep coordinating to keep inflation within the desired limits.

"The cause of high inflation are goods that have high volatility so when their supply is short their price will be high. Therefore we will pay much attention to it," he said.

Earlier, the chief of the National Bureau of Statistics, Rusman Heriawan, said he was optimistic the rate of inflation this year would be below six percent despite the effect of the electricity price hike at an average of 10 percent as of July 1 believed to last until the end of the year.

"According to me there will still be a room to keep the inflation rate with the range of 5.3 to 5.5 percent. If the prediction proves to be false, hopefully, the inflation rate will not reach six percent but just close to six percent," he said.

City analyst Johanna Chua meanwhile had revised up the rate of inflation of 2010 from 5.6 percent to 6.1 percent which is higher than the target set by the central bank at four to six percent.

Johanna said inflationary pressure kept strengthening. The 5.5. percent year-on-year inflation in June would be higher than the market exception’s of only at 4.56 percent. In the months ahead signs of increasing inflationary pressure have already been felt.

She said pressures could be attributed at least to recent electricity price hike the coming fasting month and post-fasting festivity and inflation hike in the food sector due to unpredictable season.

Source : kompas

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