PRESIDENT DRAWS PUBLIC ATTENTION TO RISING INFLATION RATE

Jakarta, Aug 16 (ANTARA) - President Susilo Bambang Yudhoyono has asked all parties concerned to be wary of the upward trend in the country's inflation rate, especially because it is related to a surge in the prices of goods.

The matter was raised by the president when presenting the Draft 2011 State Budget and the government's views on the economic outlook at a plenary session of the House of Representatives (DPR) here Monday.

"In 2010 the inflation rate is expected to increase in line with global economic growth that is boosting global commodity prices and inflation," he said.

Besides, extreme climate changes also had resulted in a decrease in world food production, the President said.

According to the President , declines in the production of such goods as wheat, sugar and corn at the global level had also increased world food prices and fueled inflation.

Therefore, the government was continuing to take the necessary measures to anticipate inflationary pressures during 2010 by conducting open market operations, maintaining adequate supplies and availability of goods.

The government was also taking steps to ensure smooth distribution of goods, develop a national logistics system and intensify agricultural extension to help farmers become better prepared for the impact of climate change.

President Yudhoyono also said the inflation rate in the year 2009 decreased to 2.8 percent from about 11.1 percent at the end of 2008 or below the 4.5-percent target set by the government.

"The inflation rate decrease in 2009 was primarily the result of a low inflation rate in food ingredients and components of goods whose prices were set by the government," he said.

The decline in 2009 inflationary pressures was responded to by a lowering of the BI rate since January 2009 and it led the average interest rate on three-month Bank Indonesia Certificates (SBIs) to reach about 7.6 percent.

The 2009 figures were lower than in 2008 when interest on three months Bank Indonesia Certificates averaged 9.3 percent.

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