REPUBLIKA.CO.ID, JAKARTA – The government revises all macro assumption in the 2012 State Budget (APBN) which will be discussed immediately before the House of Representatives (DPR). Indonesian economic growth will be revised from 6.7 percent to 6.5 percent and inflation rate will be looked over from 5.3 percent to 6-7 percent.

Cabinet meeting discussed the program, budget posture, and possible cut, the Coordinating Minister of Economy, Hatta Rajasa, said on Thursday. The revised its macro assumption in growth target, inflation rate, Indonesian Crude Price (ICP), and oil lifting target.

The proposal of revised assumption will be discussed further with the House. Rajasa said, the assumption of inflation rate was revised and increased to six until seven percent. He expects the inflation does not impact much to food sector. “The important thing is that the food price is not increasing,” he said.

The ICP assumption, which was 90 USD per barrel, is increased following the development of world crude oil price. The previous price is considered irrelevant due to the world crude oil price which is now in 118 USD per barrel. He predicts the ICP will be looked over to 105 USD per barrel. The discussion is due to next Tuesday.

The main contributors 

The Central Board of Statistics (BPS) has announced the inflation rate throughout February, which is 0.05 percent. The increasing price of gold, jewelry, rice, and shallot contributes the most to inflation rate, the Head of BPS, Suryamin, said.

“Gold and jewelry price are flaring up in 63 consumer index price (IHK) cities,” he explained.

Should the subsidized fuel price hikes, BPS predicts the potential of inflation is up to three percent. The Deputy of Statistics and Distribution in BPS, Djamal, says the assumption is valid if the rising fuel price helps the transportation fare to increase.

“When the increase is 500 IDR, then the direct impact to inflation is 0.9 percent,” he said. “Meanwhile, the indirect impact will reach one by two times from basic assumption,” he added. 

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