Head of the National Bureau of Statistics, Rusman Heriawan, stated on Thursday that inflation will come down in May and deflation will still occur due to continuing paddy grand harvest.
This will give an opportunity for Bank Indonesia not to increase interest rate to promote economic growth. Bank Indonesia will let the Rupiah’s appreciating trend to continue in order to solve imported inflation and recent surges of capital inflow.
Basically, there is a potential deflation. Grand harvest is still going on, price of rice does not increase, but the decline is happening slowly, he told journalist at the presidential palace on May 19, 2011.
Annual inflation in April 2011 down to 6.16 percent in March 2011. On month-on-month, in April 2011, deflation occurs at a rate of 0.31 percent after it touches 0.32 percent in March 2011.
Core inflation excluding oil and food prices-reaches 4.62 percent in April 2011 after it touches 4.45 percent in March 2011. Increase of chili and rice prices has caused annual inflation to record a highest increase to 7.02 percent in January 2011.
Bank Indonesia has maintained interest rate for a third straight month on May 12, 2011 after increasing interest rate by 25 basis points to 6.75 percent on February 4, 2011.