Inflation Slows in February

The country's inflation slowed in February to 0.65 percent after climbing 1.77 percent the previous month, signaling a positive outlook on price stability for the months to come, the Central Statistics Agency (BPS) reported.

The BPS also reported the country's year-on-year inflation rate in February was up by 7.4 percent, slightly higher than the 7.36 percent recorded in January year-on-year, mainly due to high staple food prices.

"The price of staple foods and from the health sector last month rose 1.59 percent and 1.56 percent, respectively, from January," BPS deputy chairman for statistics, distribution and services Ali Rosidi told a press conference.

The price of tempeh, tofu and cooking oil increased in February, while the price of red onion, rice and eggs decreased, he said.

Judging from trends in past years, Ali said the inflation rate would likely decline further in the months to follow.

"Over the last few years, the inflation rate in January and February was also high. However, it then declined."

Commenting on whether the government would be able to achieve its 6.5 percent inflation rate target amid soaring prices of oil and food on global markets, Ali said it was a probable scenario.

The government this year has found it must revise its budget earlier than usual, following the surge in oil and commodity prices. Oil prices hit US$103.5 per barrel last week.

In normal years the government revises its budget after the first semester.

BPS conducted its survey in 45 national cities, six of which suffered deflation. Jayapura in Papua had the highest inflation rate, 2.9 percent in February, while Sampit in Central Kalimantan had the highest deflation -- 1.51 percent.

BPS said total exports in January reached $11.08 billion, a 33.19 percent increase from a year earlier. There was also a 2.03 percent increase compared to total exports in December last year.

Non-oil-and-gas exports in January were $8.87 billion, rising 30.41 percent from a year earlier and a 6.16 percent increase from December 2007.

BPS said the country mostly exported to Japan, with $1.15 billion; the U.S., with $948.5 million; and Singapore, with $912.5 million.

The country's total January imports, excluding bonded zones, reached $7.6 billion, a 43.88 percent increase from a year earlier and a 11.71 percent increase from December 2007.

Bonded zone imports, including Tanjung Priok in North Jakarta and Batam port in Batam, were about $1.88 billion, with oil and gas imports at $1.8 million and non-oil-and-gas imports $1.87 billion.

"BPS now considers the bonded zone part of the country, instead of overseas," said BPS deputy chairman for production statistics Pietojo.

The country mostly imported goods from China, Japan and the U.S. to the bonded zone.