BI: 2010 inflation to reach about 5 pct

Surabaya, E Java (ANTARA News) - A central bank official has predicted the on-year inflation rate is likely to match the bank`s forecast of 5, plus and minus 1, percent in 2010.

"The inflation rate forecast of 5 percent already includes the planned electricity tariff hike," Perry Warjiyo, Bank Indonesia (BI)`s director of economic research and monetary policies, said at a seminar on the latest economic developments here on Friday.

He said the inflation target for 2010 remained unchanged despite inflationary pressure in May caused by non-fundamental factors including volatile prices in the food sector.

"The inflationary pressure at the start of this year was caused by the rising prices of rice and in May by the rising prices of food seasonings such as red chili, and garlic," he said.

The Central Bureau of Statistics (BPS) said early this month the on-month inflation rate in May reached 0.29 percent, bringing year-on-year inflation rate to 4.16 percent.

"One of the factors pushing up the May inflation was the rising price of garlic. Much of national needs for garlic is supplied by China. Because of tight import policy the price of garlic rose, thereby affecting the inflation," he said.

Given the slight inflationary pressure, the on-year inflation would match the bank`s forecast of 5, plus and minus 1, percent, he said. (*)

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