JAKARTA: BI economy and monetary policy executive director Juda Agung said the government’s decision to lower fuel prices and public transportation fares at the beginning of this month would bring about slight deflation.
“We expect deflation of around 0.3 percent following the roughly 4 percent declines in fuel prices and public transportation fares,” Juda said in Jakarta on Thursday.
The government has decided to cut subsidized fuel prices by Rp 500 (4 US cents) per liter: The price of subsidized Premium gasoline falls by Rp 500 from Rp 6,950 per liter to Rp 6,450, while subsidized diesel drops Rp 500 from Rp 5,650 to Rp 5,150 per liter. In conjunction with this policy, the government has also decided to cut transportation fares by 3 percent.
The Central Statistics Agency (BPS) said Indonesia had recorded monthly inflation of 0.19 percent in March, bringing the year-to-date inflation rate to 0.62 percent and the annual rate to 4.45 percent year-on-year.
BI executive director of communication Tirta Segara said the low inflation in March would support the government’s aim of achieving inflation of 4 percent plus or minus 1 percent in 2016.
“BI is confident that inflation will be around the midpoint of the 2016 inflation target range. BI will continue its policy of coordinating with the government in controlling inflation to anticipate inflationary pressures caused by volatile food prices,” he explained.
