Inflation Target Achievable: Deputy Minister

Jakarta (Antara Bali) - Deputy Finance Minister Bambang Brodjonegoro stated that the 5.3 percent inflation target of 2014 can be realized considering the achievement made so far by the government in controlling the price of basic foodstuff.

"If you look to the end of the year predictions, expectations should be below five percent," Bambang announced at the Parliament on Monday.

Bambang's estimate on the inflation at the end of the year is inseparable from the August inflation rate of 0.47 percent lower than that in previous years.

That way, the calendar year inflation rate from January to August 2014 is 3.42 percent, and the annual basis (yoy) inflation was recorded at 3.99 percent.

"With the 'year to date' rate of 3.42 percent, we could be under five percent by the end of the year," said Bambang.

The August inflation rate of 0.47 percent, he noted, also includes the impact of restrictions on fuel oil sale by state-owned oil and gas firm Pertamina.

However, Bambang admitted that the challenges of rising inflation still existed in the coming months.

Inflationary pressure could arise due to the increase in electricity tariffs for industrial customers, government, and households as of September, and also due to the increase in the gas price of 12-kilogram cylinders.

"It will add to September inflation," he pointed out.

Even so, as to the trends in previous year, the inflation rate in September-October can be said to always be relatively low, as ameliorated by increasing food supply, which occurred because farmers were experiencing a small harvest.

"Hopefully, the impact of rising electricity rates can be covered by the effect of a small harvest," he said.

Regarding the impact of rising gas prices of 12-kilogram cylinders, Bambang already mapped it out and predicted that it could increase inflation by 0.1 percent.

"We have calculated and concluded that the inflation will be at 0.1 percent at the highest," he noted.

In the revised 2014 state budget, the government had targeted inflation rate at the end of the year by 5.3 percent.

Head of the Central Bureau of Statistics (BPS) Suryamin announced that August 2014 inflation rate had reached 0.47 percent or lower than the inflation rate in August last year, with 1.12 percent.

According Suryamin, inflation occurred because of price increase seen from the increase in the index of some expenses, such as foodstuff (0.36 percent); food, beverages, cigarettes, and tobacco (0.52 percent); and housing, water, electricity, gas, and fuel (0.73 percent); among others.

The increase in the index has also occurred in clothing expenditure group (0.23 percent); healthcare (0.33 percent); and education, recreation, and sport (1.58 percent), while the transportation, communication, and financial services index have declined 0.12 percent. (WDY)