Inflation Rate in March: 15.74 Percent
Tuesday, 04 April, 2006 | 14:30 WIB

TEMPO Interactive, Jakarta: The yearly inflation rate as of March is 15.74 percent. The Central Bureau of Statistics (BPS) reported the inflation in March 2004 was 0.03 percent. The component inflation rate in March was 0.28 percent, while the inflation rate of the core component of the calendar year stood at 1.63 percent.

According to BPS Chief Choiril Maksum, this month’s inflation is much affected by the increase in the price of several goods and services. Inflation is mostly caused by processed food, cigarettes, tobacco, and beverages by 0.58 percent. “Every subgroup undergoes inflation this month,” Maksum told the press on Sunday (2/4).

He explained, some infrastructure in the country influences the high inflation rate this month. “Perhaps the upsurge in inflation was also due to the damage in the Trans Eastern Road (Jalitim) and the North Java Coastal Road (Pantura) which hinders distribution and so causes the price to rise,” he said.

When asked for comments, economic observer Faisal Basri said the March to March inflation at the level of 15.74 is an extraordinary decline. This is considering February to February inflation at 17 percent. “I thought the yearly inflation rate to be 16 percent,” he said.

According to Faisal, the inflation rate decline has an impact on the interest rate decline. It is predicted the weakening will be progressive. He estimated that in the Bank of Indonesia Certificate (SBI) auction this Wednesday, the SBI will drop from 12.73 percent to 12.6 percent. “The interest rate decline may be quicker until the end of the year, if April’s inflation rate is down to 14 percent, in June falls even more to 13 percent, and in October to 10 percent.”

Previously, the Bank of Indonesia’s Economic Report 2005 showed that the prospect of this year’s inflation pressure was relatively high. The pressure will last until the third quarter, especially due to the fuel price rise in October.

Yudha Setiawan, Retno sulistyowati, and Syakur Usman