After a cabinet meeting at the presidential palace here on Monday the coordinating minister for economic affairs said the government was confidant the rate of inflation could be controlled because in the past few months there had been deflation as the price of several food commodities tended to decline.
The exchange rate of the rupiah which is strengthening meanwhile is believed to be able to overcome the hike in the price of crude which has surpassed US$100 per barrel, he said.
"With regard to inflation, we saw that the months are months of deflation and it will continue to the months ahead," he said.
Citing an example he referred to the price of rice which dropped on Monday by Rp100 per liter at the Cipinang main market and also the price of other commodities which also dropped.
He said the government would continue controlling the price of food commodities so that it would not rise due to various challenges.
"The government would do a thing prudently to control inflation so that it would not reduce the people`s buying power," he said.
Hatta said until now the government had not discussed and decided to raise the price of subsidized gasoline due to increasing world crude price.
"I still believe we are still able to maintain it because the rupiah is appreciating," he said.
Finance minister Agus Martowardojo shared his view saying there was no need to be afraid of rising world crude price because the rupiah has continued to appreciate against the US dollar.
The chief of the Central Bureau of Statistics, Rusman Heriawan, meanwhile said he agreed with the finance minister that in the past three months inflation had been low due to a grand harvest season.
In the future, he said, inflation is expected to be low and even deflation is expected to happen because the price of several food commodities have dropped.
The cabinet meeting on Monday discussed inflation as well as food and energy resilience.
Hatta said on food resilience the ministers had discussed a target of a rice surplus of 10 million tons in 2014 and a minimum reserve at National Logistic Agency Bulog at 1.5 million tons this year.
They also discussed paying farmers whose harvest had failed due to extreme weather recently Rp2.6 million per ton per hectare to replay their cost for seeds, fertilizers and work.
Regarding energy they had discussed plans to increase national production of gas and oil, diversify energy sources and accelerate develop power plants to meet the 10,000 Megawatt electrification target.(*)
Editor: Aditia Maruli Radja
Copyright © ANTARA 2011
