Inflation, exports in good shape: BPS

Urip Hudiono, The Jakarta Post, Jakarta

Inflation in February turned out to be lower than expected at an on-year level of 6.3 percent -- unchanged from January -- despite concerns that severe flooding in many parts of the country last month may have pushed consumer prices up.

On a monthly basis, inflation was even lower at 0.62 percent, the Central Statistics Agency (BPS) reported Thursday, compared to a 1.04 percent rise in consumer prices in January.

Only 31 of the 45 major cities that the BPS surveys saw an increase in the rate of monthly inflation. In calculating inflation, the BPS surveys the prices of some 300 goods and services.

Despite the fall in on-month inflation, prices continued to rise, BPS deputy chief Pietojo said, with the prices of food and household utilities making the biggest contributions to February's overall inflation.

Prices of foodstuffs -- including rice, the national staple -- rose by 0.84 percent, accounting for 0.2 percent of last month's inflation, while the prices of processed foods increased by 0.65 percent, accounting for 0.12 percent of the rise in prices.

Consumers also had to pay 0.8 percent more for housing, water, electricity and fuel, which contributed 0.12 percent to February's monthly inflation, while clothing and healthcare prices rose by 0.64 percent and 0.56 percent, respectively.

Core inflation, which excludes volatile food prices and administered fuel prices, stood at a monthly 0.56 percent, and an on-year 5.98 percent.

Commenting on February's better-than-expected inflation figures, Finance Minister Sri Mulyani Indrawati said she expected consumer prices to rise by no more than 6 percent over the course of the year, lower than the government's budget assumption of 6.5 percent.

Bank Indonesia Governor Burhanuddin Abdullah said the latest inflation figures should provide room for further cuts in BI's key rate from the current level of 9.25 percent, although he added that the central bank would have to keep an eye on global rate trends.

The recent flooding from torrential monsoonal rains affected not only Greater Jakarta -- which accounts for almost a third of the nation's gross domestic product (GDP)-- but also many of the country's most important rice-growing areas, resulting in a surge in the staple's prices over the course of last month.

Inflation in February 2002, which saw similar widespread flooding, came in at a monthly 1.5 percent and an on-year 15.13 percent, compared to 1.99 percent and 14.42 percent, respectively, in January of the same year.

However, Peitojo noted that February's higher rice prices could still have a knock-on effect on inflation ahead, with the staple's retail price having risen by 8.45 percent to Rp 6,444 (71 U.S. cents) per kilogram during February.

In another report, the BPS said that Indonesia's exports had started off the year strongly at US$8.35 billion in January, 10 percent higher than the same month last year.

With imports for the same month amounting to $5.24 billion, Indonesia enjoyed a trade surplus of $3.11 billion.

Vice President Jusuf Kalla had earlier quoted the government's target of a 20 percent increase in exports for the year, although the Trade Ministry has said exports will probably grow by about 14 percent.

Indonesia's total exports surged to $100.69 billion last year on strong global demand and high prices for the country's main export commodities -- rubber, palm oil, coal and metal ores.