BI: 2012 Inflation Remains Manageable

Malang, E Java, Dec 7 (ANTARA) - Bank Indonesia (BI) has predicted inflation will remain manageable within the central bank`s range target of 4.5 percent plus and minus 1 percent this year. Fundamentally, the core inflation is still manageable and the administered price inflation is still low, the bank`s assistant director of smallholder credit bank and small and medium scale business development, Miftah Fauzi said here on Thursday. "The administered price inflation remains low since the government does not issue policies that have an impact on the prices of strategic goods and services," he said. Meanwhile, consumer price index (IHK) was recorded at 0.16 percent month-to-month in October, bringing the index to 4.61 percent year-on-year. He said low inflationary pressures were very much influenced by external and internal factors as well as support from the central bank and the government through the formation of a joint inflation control team. Therefore, Bank Indonesia has taken an interest rate policy aimed at boosting growth while at the same time strengthening policy on the rupiah`s exchange rate to ease future inflationary pressures, he said. Bank Indonesia also noted that the third-quarter economic growth was recorded at 6.17 percent year-on-year, or lower than the projected 6.3 percent, he said. The lower-than-expected growth was because of declining export performance. The third-quarter growth was fueled by strong household consumption and investment, he said. "On a supply side, the economic growth was driven by manufacturing, trade, hotel and restaurant, transportation and communication sectors," he said.