Indonesias inflation eases in April
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Indonesia's inflation accelerated at slower pace for the third times in April, as commodity prices weakened, allowing the central bank to keep its basic rate on hold at its meeting on May 12.
Head of the Statistic Bureau Rusman Heriawan told a press conference that the annual inflation reached 6.16 percent in April, year on year, after accelerating slower in March at 6.65 percent in March. On month on month deflation reached 0.31 percent in April after reaching deflation 0.32 percent in March, he said.
"Declining of prices of Onion, followed by red chilies and rice, have given the highest contribution on declining inflation pressure. The delay of removal of fuel subsidy also contributed," said Heriawan.
Indonesia's government targeted annual economic growth average of 6.6 percent by 2014 and to create million of jobs through the development of infrastructure facilities.
Analyst from CIMB Niaga bank Andry Asmoro said that the continuation of rice harvest and the strengthening of rupiah had slowed inflation pressure in April.
"Harvest still continues and the central bank policy to allow rupiah to strengthen contributed on the declining of inflation. There is no reason for the central bank to raise rate," he told Xinhua by phone on Monday.
Asmoro said that the central bank may raise rate at the beginning of the second half.
Heriawan said that core inflation reached 4.62 percent in April after reaching 4.45 percent in March, year on year, and on month it was unchanged from that of at March at 0.25 percent.
Indonesian government has made investment deals with India since earlier of this year and over ten billion U.S. dollars with Chinese businessmen last week.
Accelerating growth at modest level amid sound fundamentals and the condition on the verge of investment grade have lured seeking-higher-yield funds at advanced nations to flow into emerging markets, such as Indonesia.
The central bank has kept its benchmark interest rate unchanged since its raised by 25 basis points at 6.75 percent in February. The Indonesian government has delayed the implementation of the removal of oil subsidy to private cars from the initial plan on April 1. The move has help contain inflation pressure but, analysts have said the move may led the bank to aggressively raise interest rate further.
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