BI: Inflationary Pressure Subsides in August

Jakarta (Antara) - Bank Indonesia (BI) said inflationary pressure began to subside to 1.12 percent month to month (mtm) or 8.79 percent year-on-year (yoy) in August compared to 3.29 percent mtm or 8.69 percent yoy in the previous month. BI said in a news release issued Tuesday night, the inflation is expected to return to the normal level or less than six percent yoy in September. Much of the impact of the rise in the prices of subsidized oil fuels in July and the Idul Fitri festivities in mid August had been over, BI said. The inflationary pressure especially on horticulture followed with an increase in the prices of red onion and beef that the volatility of food inflation remains high at 1.82 percent mtm or 16.53 percent yoy. Inflation on the group of commodities with administered prices reached 0.62 percent mtm or 15.40 percent yoy driven by the rise in the transport tariffs in the Idul Fitri days and the rise in electricity tariff Meanwhile core inflation was 1.01 percent mtm or 4.48 percent yoy. The country recorded a deficit of US$2.3 billion in foreign trade in July , widening from US$0.9 billion in June. BI predicted that the country's current account deficit would reach 3.4 percent of the GDP in the third quarter of this year lower than 4.4 percent in the second quarter. BI attributed the deficit in trade to growing imports of oil fuels . Deficit in the oil and gas sector reached US$1.86 billion to follow the growing demand for oil fuels from the transport sector. Deficit was also recorded in the trade of other commodities reaching US$.045 billion. Exports rose 2.4 percent mtm especially in the exports of minerals including copper and coal and manufactured goods and electrical equipment but not enough to offset a surge in imports. Imports rose 11.4 percent mtm mainly in the imports of capital goods, industrial basic materials and consumer goods. Imports of oil and gas rose higher by 17.17 percent mtm. (*)