Inflation will decline
this year, says analyst
The Jakarta Post, Jakarta | Business | Wed, March 19 2014, 11:04 PM
Rating agency PT ICRA Indonesia director Joko W. Widodo predicts that the inflation rate in 2014 will decline from last year.
“We predict that, compared to last year, the inflation rate this year will decline, as several factors that occurred last year are unlikely to be repeated,” he said in Jakarta on Wednesday, as quoted by Antara news agency.
Joko said the inflation rate in 2013 was quite high due to several factors, one of which was the fuel price hike ahead of the fasting month of Ramadan and subsequent celebration of Idul Fitri.
“As is known, the period [of Ramadan and Idul Fitri] is a point where the inflation rate usually increases,” he said.
The fuel price hike ahead of Ramadan and Idul Fitri had worsened inflationary pressures in Indonesia, he added.
The analyst further said that in 2013, the inflation rate reached 8.2 percent, which was quite high, but it was hoped that such high inflation would not be seen again this year.
“This year, markets have shown that the inflation rate will stand at around 4.5 percent, and this level is normal,” Joko said. Such a prediction, he added, had taken into account the impact of electricity prices in the industrial sector. (ebf)
COMMENT :
Anne Karina Sekar
Inflation means there is a sustained increase in the price level. The main causes of inflation are either excess aggregate demand (economic growth too fast) or cost push factors (Supply side factors). The more the governmentt borrows the more it increases money supply. Higher money supply result into access money supply which will lead to high aggregate demand encouraging films to raise prices of their goods and services.Tight fiscal policies and tight monetary policies could also be the solution to inflation. So that our country Indonesia could decrease our numbers of inflations and stays in normal level.
“We predict that, compared to last year, the inflation rate this year will decline, as several factors that occurred last year are unlikely to be repeated,” he said in Jakarta on Wednesday, as quoted by Antara news agency.
Joko said the inflation rate in 2013 was quite high due to several factors, one of which was the fuel price hike ahead of the fasting month of Ramadan and subsequent celebration of Idul Fitri.
“As is known, the period [of Ramadan and Idul Fitri] is a point where the inflation rate usually increases,” he said.
The fuel price hike ahead of Ramadan and Idul Fitri had worsened inflationary pressures in Indonesia, he added.
The analyst further said that in 2013, the inflation rate reached 8.2 percent, which was quite high, but it was hoped that such high inflation would not be seen again this year.
“This year, markets have shown that the inflation rate will stand at around 4.5 percent, and this level is normal,” Joko said. Such a prediction, he added, had taken into account the impact of electricity prices in the industrial sector. (ebf)
COMMENT :
Anne Karina Sekar
Inflation means there is a sustained increase in the price level. The main causes of inflation are either excess aggregate demand (economic growth too fast) or cost push factors (Supply side factors). The more the governmentt borrows the more it increases money supply. Higher money supply result into access money supply which will lead to high aggregate demand encouraging films to raise prices of their goods and services.Tight fiscal policies and tight monetary policies could also be the solution to inflation. So that our country Indonesia could decrease our numbers of inflations and stays in normal level.
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