VIVAnews - The core inflation rate in December 2008 was 0.42 percent; while yearly inflation rate reached 8.29 percent. The Central Statistics Agency (BPS) stated that the positive core inflation rate was caused by market's hesitancy against the defensive monetary condition.
"BI Rate is still high. If Bank Indonesia (BI) has core inflation as its standard, the BI rate should not have been too high," said BPS Deputy of Statistics, Distribution and Services Ali Rosidi on Monday, Jan 5.
Rosidi expected that the falling inflation rate would trigger the monetary authorities to adjust the BI Rate. If BI still maintains its high rate, it will be difficult for the economic growth to hit six percent. Today, BI set BI Rate at 9.25 percent.
In addition, deflation hit 0.04 percent. Moreover, President Susilo Bambang Yudhoyono stated that cooking oil and meat prices will be decreased, which will lower the 2009 inflation rate. "If fuel prices continue to fall, then the inflation rate will be lower. If the government did not intervene in December, the inflation rate would have been high. It would have been above one percent," said Rosidi.
In addition, deflation in December occurred because there was price decrease, which was indicated by index decline on transportation, communication & financial services amounting to 2.74 percent.
Meanwhile, inflation rate of 2008 calendar year (January - December) equaled year on year inflation (December 2008 against December 2007) of 11.06 percent.
The inflation rate of core components in December 2008 reached 0.42 percent; the inflation rate of core components of 2008 calendar year (January - December) equaled the inflation rate of core components year on year (December 2008 against December 2007) of 8.29 percent.
Translated by: Bonardo Maulana Wahono
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