Inflation Predicted Higher than Target

Malang (Antara Bali) - An economist from the state-run Brawijaya University of Malang Prof. Ahmad Erani Yustika predicted that the country's inflation this year would reach 8.5 percent - nine percent overshooting the government's target of 7.2 percent.

"On-year inflation this year will far exceed the target set by the government at 7.2 percent - eight percent," Ahmad, who is also executive director of the Institute for Development of Economics and Finance (Indef), predicted here on Friday.

There are a number of dominant indicators causing an increase in  the inflation this year, he said. The main factors triggering a surge in inflation include the recent increase in the price of subsidized oil fuels ahead of the Islamic fasting month  and Idul Fitri during which the prices have always shot up, he said    
 
Inflation in July on-month is also expected to be high at around 2 to 2.5 percent, he added. He noted, however, the increase in the price of rice was not significant  as the Board of Logistics (Bulog) holds large stocks of the staple food.

Unfortunately , the government or Bulog has no control over supplies of non-rice foodstuff  allowing traders to set the prices, he said.

"The government has no control over the supplies of other important food commodities like chili, eggs, beef, red onion, cooking oil and garlic. These commodities have been behind the increase in inflation," he said. (*/DWA)