BI governor hoped that the inflation rate in 2014 will be under control and below the set level of 3.5-5.5 percent.
Jakarta (ANTARA News) - The inflation recorded at 8.38 percent for the year 2013, as announced by the Central Bureau of Statistics (BPS) on Thursday, was in accordance with our expectations, stated Bank Indonesia (BI), the central bank.

"BI had forecast the inflation rate for the year 2013 to be below 8.5 percent. I want to express that the inflation rate announced by the BPS on Thursday, is at par with our expectations. It was relatively low and over the last two months, it had been consistently low," BI Governor Agus Martowardojo noted here on Friday.

The 8.38 percent inflation rate was reached after the inflation rate in December 2013 was recorded at 0.55 percent or nearly the same as the inflation rate in December 2012, which stood at 0.54 percent.

The BI governor hoped that the inflation rate in 2014 will be under control and below the set level of 3.5-5.5 percent.

"For the year 2014, it is important that we should not become complacent, nor should we lose hope," he emphasized.

He added that the issue of the current account deficit will still pose an economic challenge in the future. Therefore, the deficit problem should be immediately tackled.

"We should aim to resolve the current account deficit problem by 2014. We should not become complacent if the trade balance shows improvement, as 2014 is the year of elections in Indonesia, and the international community will be watching us," he noted.

The BI governor remarked that there was no guarantee that the improvement in the global economy will generate sufficient fund flow into Indonesia, as 2014 is the year of political reckoning.

This year, Indonesia will hold legislative and presidential elections on April 9 and July 9, respectively.

"We have observed that fund flow towards developing countries has declined. We have to ensure good economic management so that funds, particularly investment funds, and other capital resources, will continue to flow into Indonesia," he noted.

In 2013, the BPS recorded an inflation rate of 8.38 percent or lower from the governments estimated rate of 8.5 percent.

Head of BPS Suryamin stated here on Thursday, that year-on-year (y-o-y), 8.38 percent inflation was achieved following December 2013s inflation rate that reached 0.55 percent or similar to December 2012s inflation rate of 0.54 percent.

"The slight difference in inflation numbers in 2013 and 2012 indicates that the government has been successful in curbing prices and controlling inflation," Suryamin noted.

However, the 2013 inflation rate is relatively higher as compared to the state budget assumption of 7.2 percent and the inflation rate in 2012, at 4.3 percent. This was caused by the hike in subsidized oil fuel prices around mid-year.

Even earlier, the government had estimated that the year-end inflation of 2013 would reach 9.2 percent y-o-y and the Bank Indonesia forecast that it will be around 9.0 percent to 9.8 percent y-o-y, with the assumption that the direct impact of the oil fuel price hike will not last more than three months.

Meanwhile, Minister of Finance Chatib Basri had forecast that the year-end inflation will be around 8.4 percent y-o-y with December 2013s inflation rate reaching 0.5 percent to 0.6 percent.

"Based on trends, I feel that the inflation rate would have been be lesser than that, somewhere in the range of 0.5 percent to 0.6 percent, if the prices did not significantly change or had remained at the same level," Basri explained.(*)

Editor: Heru Purwanto
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