"Until the third week (of October 2015) it was -0.09 percent. The -0.09 percent reflects deflation. We believe the inflation rate in 2015 will be lower than 4 percent," BI Governor Agus Martowardojo said at the parliament building on Thursday.
But he added that the nation needs to stay alert for a possible rise in food prices. The current drought, which is expected to last until the end of this year might affect food production in several parts of the country.
"If coordination among the government, regional governments and BI can be stepped up, the inflation rate will be kept in check," he stated.
The looming deflation in October will also be fueled by the governments decision to drop a plan to raise electricity tariffs and gas prices, Agus added.
"The low inflation will also be caused by the decision to drop a plan to adjust electricity tariffs and gas prices in October," he said.
BI Deputy Governor Perry Warjiyo had earlier forecast that the inflation rate for 2015 would touch 3.6 percent, the lower limit of the central banks inflation target.
"The inflation rate is 2.15 percent year-to-date or 6.24 percent year-on-year," Perry said.(WDY)
