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| The March harvest likely tamed an increase in the price of rice this month, while other commodity prices rose. (Reuters Photo/Y.T. Haryono) |
The consumer price index — a measure of the price level of goods and services — rose 4.0 percent to 4.1 percent in March from a year earlier, according to estimates from four economists surveyed by the Jakarta Globe on Friday.
That would be the first acceleration in five months after inflation rose just 3.56 percent in February, the slowest pace since March 2010. The Central Statistics Agency (BPS) will announce March’s inflation and trade data on Monday.
Eric Alexander Sugandi, an economist at Standard Chartered Bank in Jakarta, predicted inflation rose 4.1 percent in March, as prices started to creep up on expectations that the price of subsidized fuel will increase.
Prices of durable goods such as clothing and electronics “have been creeping up on the back of higher fuel price prospects,” he said. The rice harvest season, which falls in March, helped food prices to stabilize, Eric added.
Anton Gunawan, an economist at Bank Danamon, predicted a 4.02 percent increase in the CPI in March, citing falling prices of gold and jewelry, which particularly affect so-called core inflation, which excludes volatile food and energy prices.
Anton said year-on-year core inflation may have reached 4.35 percent last month, slightly faster than February’s 4.31 percent.
“The pressure of some raw food prices, especially rice, may be lower due to the recent harvesting season, while prices for chicken, eggs and chili may have decreased significantly compared to the previous month,” he said.
Prices of staple food commodities such as rice, cooking oil, chicken and eggs have been declining from a month ago, according to data from the Trade Ministry released on Thursday.
Medium-grade rice sold at Rp 8,078 (88 cents) a kilogram, down 1 percent from a month before. Chicken was sold at Rp 24,413 a kilogram, or 0.8 percent lower, and eggs at Rp 17,525 per kilogram, a 3 percent decline from the previous month.
Prices of regular chili showed a steep increase of 14 percent from the previous month, but that price was still lower than a year ago, Trade Ministry data showed.
Gundy Cahyadi, an economist at OCBC Bank in Singapore, forecast inflation at 4.1 percent inflation in March. But that pace would be slow compared with what should be expected if the subsidized fuel price is increased, he said.
The government has proposed raising the price of low-octane gasoline to Rp 6,000 per liter from Rp 4,500 next month.
The proposal has been met with widespread protests across the nation, demanding that the government abandon the move.
Gundy said if the government were to implement the 33 percent price increase as proposed, inflation would rise to 7 percent to
8 percent by mid-2012 before moderating slightly by the end of the year at an average of 6.5 percent.
When the state last raised the subsidized fuel price in May 2008, inflation accelerated.
Inflation rose 8.96 percent in April 2008 in anticipation of the price increase.
Inflation continued to rise in the following months of 2008, causing the full-year inflation to accelerate to 11 percent.
Back then, the price of subsidized gasoline was raised by the same amount and percentage as is planned this time around. The fuel price was returned to its lower level in 2009.
source:http://www.thejakartaglobe.com
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