March inflation of 0.3% which is the highest for 7 years

JAKARTA, [IFN]. It seems that the trend of deflation that has lasted for the past two months did not continue into March 2015. Bank Indonesia (BI) projects, this month will be inflation in the range of 0.27% to 0.3%.


BI Governor Agus Martowardojo stated, if the central bank inflation forecasts proved, this is the largest March inflation rate over the past seven years. "Indeed, slightly higher than the average inflation in March during the last seven years. Seven years on average inflation in the range of 0.21%," he said yesterday.


According to Agus, a decrease in the price of meat and eggs which accounts for deflation in February was not enough to create deflation in March. Another factor that will whip inflation this month: the increase in the price of rice, onion, and fuel oil (BBM).


Ministry of Commerce noted, in early March medium rice price increases at the national level to Rp 10 636 per kilogram (kg), from Rp 9746 per kg in February. Medium onion prices on March 23, jumped 38.76% in February compared to Rp 29 681 per kg.


Then, fuel prices also rose by 1 March. Premium price rose to Rp 200 per liter to Rp 6,900 per liter for Java-Bali. Pertamax and the like also increased twice during March, respectively USD 200 and USD 300 per liter.
Currently PERTAMAX price Rp 8,600 per liter, up from last month that only Rp 8,100 per liter. Meanwhile, the weakening of the rupiah against the US dollar (US) that occurred during the previous two weeks is not going to have a major impact on inflation in March.


Because the exchange rate eagle has strengthened throughout last week. Although the highest during the last seven years, Agus said, the prediction of the March inflation rate is still quite reasonable and restrained. He argued, there are government policies as well as better coordination between central and local governments to control the price of goods and services.


Inflation is maintained
Moreover, six pack government policy to suppress the current account deficit, aka the current account deficit (CAD) will be valid from April tomorrow. Therefore, the central bank projected inflation rate this year will be maintained in the range of 4% plus or minus 1%. "The government's commitment to reform structural, fiscal keep up to be sustainable, and make better current account, the effect is very positive," said Agus.


Lana Soelistianingsih, economist Samuel Asset Management, rate, increase in food ingredients to be one of the biggest contributors to the Consumer Price Index (CPI), which is 20%. The weakening of the exchange rate also contributed big to the CPI, by 30%. The rupiah weakening effect comes from processed food, medicine, and clothing.


That is why, Lana predicted, inflation during March could be even higher, reaching 0.4%. For this year's inflation is estimated to 3.58%. Notes, there is no significant increase in fuel prices. "If fuel goes up to Rp 8,500 per liter, it is a warning. If the price of oil back to the US $ 80-US $ 100 per barrel, the danger. But, I estimate that the price is not that high," added Lana.