"So, just wait."Jakarta (ANTARA News) - The Indonesian central bank (Bank Indonesia /BI) governor Darmin Nasution said the central bank has already prepared calculations for inflation in case the government issued a decision on subsidized oil.
"We have already calculated if the restriction is set this much inflation will be this high. It would all depends upon how much the hike will be or if restriction is done on private cars how much it will be worth," he said at a Supreme Court building here on Monday.
Darmin made the statement in response to the government`s plan to issue a decision on controlling the use of subsidized gasoline soon to reduce deficit.
He said he would immediately announce the rate of inflation soon after the government issued the decision.
"So, just wait. We will tell the rate soon after it. But do not ask me about it now," he said.
He said Bank Indonesia also has already conducted simulations to find options to be taken in response to the government`s decision and so the monetary authorities would be ready with measures in case the decision was announced.
BI deputy governor for monetary management Perry Warjiyo meanwhile said that whatever the decision the government would take its impact on inflation would be temporary.
"The impact would be short term or temporary but in the long term it would be good for the economy," he said.
He admitted that he had taken part in studying options to control the use of subsidized oil but he declined to tell in detail possible inflation hike caused by every option.
"What is clear is if the option is increasing the price and it is effective for all cars the inflation would be bigger. But it seems the government would only raise the price based upon segments namely only for private cars and so the inflation would be smaller," he said.
He said if the price of subsidized gasoline for motorbikes would be raised inflation is predicted to be big because motor bikes contribute 50 percent of subsidized fuel use.
"However whatever the decision it would take it would only be temporary. This year and next year would be elections years and they would have a significant effect on the economic growth," he said.
The government has set the oil subsidy at Rp274.7 trillion in the 2013 budget consisting of Rp80.9 trillion for electricity subsidy and Rp193.8 trillion for fuel oil subsidy.
The volume of subsidized fuel oils meanwhile has been set at 46 million kilo liters but it is predicted to reach 53 million kilo liters and therefore to affect fiscal conditions unless control is done.
The government is still studying the options which a number of analysts have said would different impacts on inflation and budget reduction. ***3***
reporting by rangga pandu asmara jingga
(H-YH)
(T.SYS/B/H-YH/O001) 15-04-2013 15:31:42
Editor: Priyambodo RH
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