Chairul Tanjung Expects Deflation in May 2014 due to Stable Food Prices

Deflation in April of 0.02 percent was mainly supported by a sharp decline of prices in the volatile foods group. These declining food prices were the result of abundant crops supply due to the peak of the harvest season. Traditionally, the months of April and May bring deflation or low inflation to Southeast Asia's largest economy due to the harvest season.

Ten days prior to the start of the holy fasting month of Ramadan (June), the government will conduct market operations in order to anticipate higher food prices. Usually, inflationary pressures rise during Ramadan as people buy more food products as well as clothing, shoes, and other consumer products. Commodities that are closely monitored during the market operations include beef, chili, garlic, onions, chicken meat, cooking oil and rice.

In order to safeguard fiscal stability, Tanjung focuses on slashing government budgets that are not aimed at strengthening the economy or the welfare of the people. These include the budget for government officials' vehicles and the budget for building construction.

Inflation in Indonesia:

Month	Monthly Growth           2013	Monthly Growth           2014
January	1.03%	1.07%
February	0.75%	0.26%
March	0.63%	0.08%
April	-0.10%	-0.02%
May	-0.03%
June	1.03%
July	3.29%
August	1.12%
September	-0.35%
October	0.09%
November	0.12%
December	0.55%
Total	8.38%	1.39%

 

	2008	2009	2010	2011	2012	2013
Inflation (annual percent change)	9.8	4.8	5.1	5.4	4.3	8.4

^{Source: Statistics Indonesia}

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