Indonesian inflation could rise to 7.9 percent

Indonesian inflation could rise to 7.9 percent

(ANTARA/Oky Lukmansyah)

The government needs to regulate the transport tariff to control inflation.
Jakarta (ANTARA News) - Indonesian Central Bank (Bank Indonesia/BI) said Indonesian inflation could surge to as high as 7.9 percent as a result of the rise in the prices of subsidized oil fuels.

Direct and indirect impact of last weeks` oil fuel price hike on inflation is 2.54 percent, Executive Director of Economic and Monetary Policy of the central bank Dody Budi Waluyo said here on Monday.

Unless the problem is seriously addressed, inflation this year could reach 7.9 percent exceeding the government`s estimate of 7.2 percent, Dody said.

The impact of the increase in the prices of subsidized oil fuels would last for three months notably in the public transport cost.

Dody said the government needs to regulate the transport tariff to control inflation.

The central bank itself has taken steps in a bid to curb inflation by raising its benchmark interest rate (BI rate) from 5.7 percent to 6 percent earlier this month even before the government announced the oil fuel price hikes.

The government has predicted the oil fuel price hikes would push up the country`s inflation to only 7.2 percent this year from the original target of around 6 percent.
(Uu.H-ASG/B003)

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