IMF estimates Indonesia's inflation to stay low this year

12:54, June 03, 2010      

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International Monetary Fund (IMF) estimated that inflation rate in Indonesia would not exceeding 5 percent by the end of the year even though the government goes ahead with implementing power bill hike plan and limiting the consumption of subsidized gasoline, local media reported here on Thursday.

Thomas R. Rumbaugh, the IMF representative in Indonesia said that power bill hike plan would only contribute 0.2 percent to the inflation rate. Meanwhile, the plan to limit subsidized gasoline consumption would be insignificant to influence the inflation rate.

At the same time, the growing bank loans and recovering domestic demands would give significant pressure to the inflation rate, Thomas said.

"By considering all of those factors, we estimated that the inflation will grow to no further than 5 percent before year end," Thomas was quoted by the Bisnis Indonesia daily.

According to the data issued by the Central Statistic Bureau ( BPS), inflation rate in May was recorded at 0.29 percent. It made the inflation rate from January to May this year has reached 1.44 percent.



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