"The worst rate could be between 8.0 percent and 8.5 percent, the best rate would be between 6.0 percent and 7.0 percent," Aviliani said.Jakarta (ANTARA News) - Economist Aviliani said the rate of inflation could reach 8.5 percent in 2012 if the government decides to raise the subsidized fuel price on April 1.
"The worst rate could be between 8.0 percent and 8.5 percent," she said here on Tuesday.
She noted that the rise of the price of subsidized gasoline and diesel fuel would contribute 1.7 percent to 2.0 percent to the inflation.
"The best rate would be between 6.0 percent and 7.0 percent," she added.
Aviliani, who is also the secretary of the National Economic Committee, said the estimate was still within the assumed inflation rate set by the government at the 2012 revised budget, which is 7.0 percent.
The Ec-Think chairperson noted that the hike of the inflation rate must be monitored closely because it could increase the price of food items.
In view of that, she suggested that the government reconsiders the option of restricting the use of subsidized oil fuels as the political and economic risk of that would be smaller than the price increase.
"I think the economy could still grow and perhaps the government should just restrict subsidized fuel consumption, as the risk would be less than that of the price hike," she said.
She added that the impact on the rate of inflation caused by restriction was below 1.5 percent.
Aviliani suggested that the subsidized fuels be restricted to motorcycles, goods transportation vehicles and public transport only.
"Private cars deserve no subsidy," she remarked.
The subsidized fuel price hike proposal would be determined in the plenary session of the House of Representatives on March 30 as the party factions have failed to achieve a compromise with the government.(*)
Editor: Heru Purwanto
Copyright © ANTARA 2012
