End-of-Year Inflation May Be Under 6 Percent
Thursday, 23 November, 2006 | 14:39 WIB

Tempo Interactive, Jakarta: Bank Indonesia (BI) has estimated that the inflation rate by the end of the year will be under six percent, which is better than the target of seven plus minus one percent.

“It can be under six percent if inflation in November and December of this year follows the historical pattern,” said Senior Deputy Governor of BI Miranda S. Goeltom yesterday (11/22) in Jakarta during the 2007 Economic Outlook presentation.

The inflation trend up to the third quarter of 2006 did show was significant.

October inflation had increased 0.86 percent against September's 0.38 percent.

However, yearly inflation of October dramatically decreased to 6.29 percent compared to last year's 14.9 percent.

Calendar year inflation (January-October 2006) was low: 4.96 percent.

Miranda said she was optimistic that the decrease of inflation would continue in 2007, although there would be increases in the price of goods early in the year.

However, the increase of inflation at the beginning of the year would not affect the yearly inflation rate much so that the inflation rate of 2007 would still decrease.

“At the end of 2007, inflation may be in line with the set target of six plus minus one percent,” she said.

According to her, economic growth may also reach the target of between five and 5.7 percent since the Indonesian macroeconomic condition in 2006 keeps improving.

The indication was that the trend of inflation had decreased and the Rupiah exchange rate against the US dollar was stable.

In fact, national economic growth next year may be higher than this year.

“Minimally, it will reach six percent.”

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