ID :
17820
Tue, 09/02/2008 - 18:58
Auther :
Shortlink :
http://m.oananews.org//node/17820
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INFLATION IN SEPTEMBER TO BE ONE PERCENT : OBSERVER
Jakarta, Sept 2 (ANTARA) - Economic observer Aviliani forecast on Tuesday that inflation in September 2008 would be about one percent, exceeding the August rate of 0.51 percent.
"Inflation will reach this level if the government is unable to control the increasing prices of goods and services," he said.
He said inflation was expected to be relatively high in the months ahead due to an expected surge by about 10-25 percent in basic necessaries' prices.
The INDEF researcher said the government could take under control only the prices of four commodities through market operations, namely sugar, rice, cooking oil and wheat flour.
The government would be helpless with regard to the increase in the prices of other commodities because they were controlled by the market mechanism, according to Aviliani.
However, he said, there was a way to reduce the price increases, namely by supervising goods distribution. "No matter how large the number of stocks, if their distribution is not controlled their prices will go up."
He said gas for household needs, for example, if its distribution wa not controlled, it would most likely become a trigger of inflation, even without a government decision to raise its price.
In connection with an estimate that inflation would reach 12 percent in 2008, Aviliani asked BI not to increase its benchmark interest rate.
"There is no need to offset inflation by raising the interest rate. This is for the sake of banking credit growth and the development of the infrastructure and plantation sectors," he added.
In the meantime, director for macro-planning affairs at the National Development Planning Board (Bappenas), Bambang Prijambodo said that Bank Indonesia should maintain its benchmark interest rate at 9 percent while ascertaining whether an easing in the upward trend in inflation will continue.
"The easing in the upward trend in inflation still needs to be observed before taking a decision on (raising) the benchmark interest rate," said.
"Inflation will reach this level if the government is unable to control the increasing prices of goods and services," he said.
He said inflation was expected to be relatively high in the months ahead due to an expected surge by about 10-25 percent in basic necessaries' prices.
The INDEF researcher said the government could take under control only the prices of four commodities through market operations, namely sugar, rice, cooking oil and wheat flour.
The government would be helpless with regard to the increase in the prices of other commodities because they were controlled by the market mechanism, according to Aviliani.
However, he said, there was a way to reduce the price increases, namely by supervising goods distribution. "No matter how large the number of stocks, if their distribution is not controlled their prices will go up."
He said gas for household needs, for example, if its distribution wa not controlled, it would most likely become a trigger of inflation, even without a government decision to raise its price.
In connection with an estimate that inflation would reach 12 percent in 2008, Aviliani asked BI not to increase its benchmark interest rate.
"There is no need to offset inflation by raising the interest rate. This is for the sake of banking credit growth and the development of the infrastructure and plantation sectors," he added.
In the meantime, director for macro-planning affairs at the National Development Planning Board (Bappenas), Bambang Prijambodo said that Bank Indonesia should maintain its benchmark interest rate at 9 percent while ascertaining whether an easing in the upward trend in inflation will continue.
"The easing in the upward trend in inflation still needs to be observed before taking a decision on (raising) the benchmark interest rate," said.
