The Jakarta Post, Jakarta
Inflation picked up again in February, figures from the Central Statistics Agency (BPS) show, as a slow start to the harvest season pushed up food prices, thereby putting in doubt any hopes of quick interest-rate relief.
Consumer prices rose by 0.58 percent in February compared to January, the BPS reported Wednesday, giving a year-on-year rate of 17.92 percent.
Although February's monthly inflation figure is lower than January's 1.36 percent, it is in marked contrast to deflation of 0.17 and 0.02 percent recorded in the same month in 2005 and 2004 respectively.
Last month's on-year inflation rate was also higher than the 17.03 percent recorded in January and 17.11 percent in December last year.
BPS chairman Choiril Maksum said February's inflation was mainly driven by a rise in the price of both staple and processed foodstuffs.
""The price of staple food, rice in particular, remained high as February marks only the start of the harvest season, which won't reach its peak until March and April,"" he said.
Continued seasonal flooding across the country had also damaged -- if not ruined -- rice crops in a number of regions, thereby leading to supply shortages and higher prices.
Staple food prices were the largest contributor to February's inflation, rising by as much as 1.18 percent, and contributing 0.28 percent to the overall month-on-month inflation rate
Besides staple food prices, consumers also saw a 0.65 percent rise in processed food prices, which contributed 0.11 percent to February's inflation.
Other main inflation contributors were housing, fuel and utility costs, which increased by 0.55 percent.
The only relief in sight for hard-pressed consumers were falls in the prices of vegetables, poultry products, and kerosene, and lower education costs.
February's inflation data may prompt Bank Indonesia to reconsider easing its benchmark interest rate to help spur economic growth. The central bank's Board of Governors is scheduled to hold its next monthly monetary policy meeting on March 7.
BI has kept its key BI Rate unchanged at 12.75 percent since January after hiking it six times from 8.5 percent in July last year to support the rupiah and contain inflationary pressures.
The government has officially targeted full-year inflation of 8 percent in this year's budget.
The central bank, meanwhile, has forecast that monthly inflation will persist at 3.19 percent in the first quarter, before easing to 2.36 percent in the fourth quarter, ending the year at an annual level of between 7 and 9 percent. This forecast has already factored in possible power price hikes, although only up to a maximum of 30 percent.
On-year inflation wrapped up 2005 at 17.11 percent, easing from a six-year high of 18.38 percent in November after last year's second round of fuel price hikes in October.
