November's Inflation Predicted to be Lower
Friday, 01 December, 2006 | 15:03 WIB

TEMPO Interactive, Jakarta: Economist predict that the inflation rate in November 2006 will drop again compared to October's inflation. The decrease is caused by the effect of last year's fuel oil price rise that has all but disappeared and the absence of major events that influenced the market.

“November's inflation is between 0.5 and 0.6 percent,” Citigroup economist Anton Gunawan told Tempo yesterday (30/11). In the meantime, year on year inflation is predicted to be around 5.5 percent.

According to him, last month's inflation rate is still categorized as high because it has not yet included the factor of transportation costs rise last Lebaran. “Only some of it was calculated,” he said.

The Central Statistics Bureau (BPS) will again announce the inflation rate today. October's inflation showed a significant decrease compared to September's inflation. Annual inflation reached 6.29 percent, a reduction compared to September's inflation rate of 14.9 percent.

PT Bank Internasional Indonesia’s (BII) economist Ferry Latuhihin, is more optimistic. He predicts that November's inflation rate will be around 0.2 percent and the annual inflation rate between 5 and 5.6 percent.

In addition to the effect of last year's fuel oil price rise, Ferry said the declining inflation rate is also because there were no major events which triggered the consumption rate in November.

Anton said that the peak inflation rate decrease will occur next year. However, it is estimated that the inflation decrease peak will be later than a few months. This is because of the delay of next year's harvest time due to a prolonged dry season this year.

“Deflation will be in April 2007 at the earliest because the harvest time is delayed. Unless the government is responsive (importing rice), it can be in March,” he said.

SURYANI IKA SARI