JAKARTA: The government is optimistic that the annual inflation target of 4 percent can be achieved, following the release of data that showed annual inflation in April stood at 3.6 percent.
Coordinating Economic Minister Darmin Nasution said the month-on-month deflation in April at 0.45 percent was due to the cut in fuel prices and public transportation fares, as well as a maintained supply of staple foods.
“If we look at the annual rate of 3.6 percent, it is in line with the government’s target of 4 percent,” Darmin said on Tuesday in Jakarta.
The April deflation was also in line with Bank Indonesia’s forecast of 0.33 percent deflation following the roughly 4 percent decline in public transportation fares and a cut in fuel prices by Rp 500 ( 4 US cents ) per liter.
Darmin said that while the deflation signified lower prices due to a growing supply of goods exceeding demand, the people’s purchasing power had also risen and boosted the country’s economic growth.
The Central Statistics Agency is scheduled to release the latest report on Indonesia’s economic growth in the first quarter of 2016.
The central bank has predicted the country’s gross domestic product ( GDP ) will grow by 5.1 percent year-on-year in the first quarter and 5.2 percent in the second quarter, driven mainly by household spending, public infrastructure spending and investment.
Both projections are higher than the 2015 growth of 4.73 percent in the first quarter of 2015 and 4.66 percent in the second quarter.
