Inflation rate climbs to 11 percent after fuel price hikes

The Associated Press ,  Jakarta   |  Tue, 07/01/2008 8:07 PM  |  Business

Indonesia's inflation rate climbed to 11 percent after government fuel hikes caused the price of food and other basic goods to skyrocket, the Central Statistics Bureau said Tuesday.

That sparked speculation that Bank Indonesia Governor Boediono could raise the benchmark interest rate for the third month in a row.

Consumer prices rose 11.03 percent in June from the same period last year, the bureau said on its Web site, noting that the cost "all goods and services" have climbed up. Food staples alone are
up more than 19 percent from 2007.

The inflation rate was 10.4 percent in May - when the government slashed fuel subsidies to avoid a budget blowout amid the soaring cost of oil on the global market.

Prices at the pump increased 30 percent overnight, hitting the poorest in the nation of 235 million the hardest. (***)

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