ID :
41518
Mon, 01/19/2009 - 16:23
Auther :
Shortlink :
https://www.oananews.org//node/41518
The shortlink copeid
INFLATION CAN BE LESS THAN FIVE PCT : ECONOMIST
Yogyakarta, Jan 19 (ANTARA) - The inflation rate in Indonesia in 2009 can be lowered to less than five percent after the fuel oil price and basic electricity rate cuts announced by the government on January 15, an economist here said.
"Usually, the inflation rate in Indonesia ranges between five and 10 percent but with the fuel oil price and electricity rate cuts, it could be lowered to less then five percent," Dr Sri Adingsih, an economist at Gajah Mada University, said here on Sunday.
She said so far, Indonesia's inflation rate had always been higher than those of other countries, advanced states in particular, where it could be as low as two to three percent.
Adiningsih predicted that advanced states would experience deflation in 2009.
She said, however, the inflation rate could not be determined by fuel oil prices and the electricity rate only but also by market conditions, namely the conditions of demand and commodity prices.
"At present, what is happening is a decline in commodity prices followed by a fall in demand for goods. This needs to be watched," she said.
She expressed concern over the possibility of an economic depression as a result of market gloom which in the end could hamper economic growth, in spite of the fact that inflation would drop.
The Indonesian market was also highly influenced by the rupiah's exchange rate against foreign currencies, particularly the US dollar.
The rupiah was still weak in terms of its exchange rate against the US dollar so that this condition also needed to be watched, she said.
"Our international trade transactions are made in US dollar while the Indonesian economy is relatively open," she said.
According to Adiningsih, the steps that should be taken in order to avoid economic depression were increasing domestic and international demand, encouraging stimuli for fiscal and budget revenues, lowering bank interest rates and making its easier for business to obtain credits.
"Usually, the inflation rate in Indonesia ranges between five and 10 percent but with the fuel oil price and electricity rate cuts, it could be lowered to less then five percent," Dr Sri Adingsih, an economist at Gajah Mada University, said here on Sunday.
She said so far, Indonesia's inflation rate had always been higher than those of other countries, advanced states in particular, where it could be as low as two to three percent.
Adiningsih predicted that advanced states would experience deflation in 2009.
She said, however, the inflation rate could not be determined by fuel oil prices and the electricity rate only but also by market conditions, namely the conditions of demand and commodity prices.
"At present, what is happening is a decline in commodity prices followed by a fall in demand for goods. This needs to be watched," she said.
She expressed concern over the possibility of an economic depression as a result of market gloom which in the end could hamper economic growth, in spite of the fact that inflation would drop.
The Indonesian market was also highly influenced by the rupiah's exchange rate against foreign currencies, particularly the US dollar.
The rupiah was still weak in terms of its exchange rate against the US dollar so that this condition also needed to be watched, she said.
"Our international trade transactions are made in US dollar while the Indonesian economy is relatively open," she said.
According to Adiningsih, the steps that should be taken in order to avoid economic depression were increasing domestic and international demand, encouraging stimuli for fiscal and budget revenues, lowering bank interest rates and making its easier for business to obtain credits.
