asia-invest.info

Today the National Statistics Office (Badan Pusat Statistik) reported that consumer prices rose at 11.03% in June 2008. In May 2008 the Indonesian Government increased fuel prices dramatically pushing consumer prices by 10.4%.

Dr. Rusman Heriawan, Director General of BPS presented the latest figures in Jakarta. Starting with June 2008, CPI will be based on a consumption pattern obtained from 2007 Cost of Living Survey in 66 cities (2007=100). Without this modification inflation would have been reported at 12.8% for June 2008.

Especially poor people were hurt by higher food and fuel prices. In Indonesia more than 15% of the population live on less than USD 20.- a month.

The increase in consumer prices make it more likely that Bank Indonesia will increase key interest rates at the next meeting on July 3rd, 2008 to fight inflation.

Today Domestic Trade and Consumer Affairs Minister Shahrir Abdul Samad informed the public that consumer prices rose by 3.8% in May 2008.

After the increase of fuel prices on June 5th, Malaysia’s central bank Governor Zeti Akhtar announced that Malaysia’s inflation rate may reach 5% in June 2008. For next month analysts expect electricty rates to rise. This will put additional pressure on Bank Negara Malaysia to increase interest rates to curb inflation. The next regular meeting of the central bank is scheduled for July 25th, 2008.