JAKARTA. The Central Statistics Agency (BPS) has predicted inflation will decrease on the back of the fasting month of Ramadhan, set to start in early June.
"The government should prepare supplies of basic commodities in order to maintain commodity prices. Inflation in June is expected to be moderate," BPS deputy head of distribution and statistics Sasmito Hadi Wibowo said in Jakarta on Monday, adding that as long as there was no increase in fuel prices, commodity prices would remain at a safe level.
Sasmito also predicted low inflation, dropping below 0.5% this month, partly as a result of the decrease in fuel prices since April, resulting in 0.45% deflation. "Fuel prices will probably be stable this month, resulting in relatively light inflation, ranging below 0.5%," he said.
The BPS reported recently that Indonesia had recorded deflation of 0.45% last month as a result of the government's decision to cut fuel prices and public transportation fares at the beginning of the month.
The slight deflation has brought the year-to-date inflation rate to 0.16% and the annual rate to 3.36% year-on-year.
Sasmita was optimistic that with the low inflation, Indonesia could target inflation of 3 to 5% by the end of 2016. "An inflation target of 4% is still achievable. The key is to maintain the supply of staple foods and steady fuel prices," he added.
Meanwhile, BPS head Suryamin said the government's decision to lower fuel prices by Rp 500 (3 US cents ) per liter - 6.61% -since the beginning of April had driven deflation.
The agency also recorded lower prices of staple foods thanks to steady supplies last month. The price of red chilies plunged by 25.41%, followed by the price of potatoes dropping by 8.32%. Meanwhile, the price of chicken slid by 3.24, followed by rice, which went down by 1.47%, and fish, down by 1.45%.
"During the same period, we also recorded an electricity rate reduction of 1.62% and land transportation fares down by 0.74% following the cut in fuel prices," he said, adding that airplane fares also slid by 2.67%. (Ayomi Amindoni)
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