TEMPO.CO, Jakarta - Bank Indonesia Governor Agus Martowardojo said on Friday, January 23, 2015, that the inflation rate on the third week of January stood at 0.07 to 0.1 percent, and the year-on-year inflation rate was at 7.5 percent.

Agus explained that the decline in subsidized fuel prices earlier had significantly eased the inflation rate. In addition, the government had successfully controlled the prices of several commodities, including chili, that lower prices of other commodities.

Based on the favorable situation, Agus predicted that the inflation rate would stood at 4 percent with minus or plus one percent, “as long as the year-on-year inflation rate in November is still high,” he said.

Earlier, Indonesian Chamber of Commerce and Industry head Suryo Bambang Sulistio projected that the fuel price hike in November 2014 would have an impact on the inflation rate this year.

“But the impact would last for only few months,” he said.

After the fuel price declined, the inflation rate was projected to return to 5 to 7 percent this year.

The government has set inflation rate assumptions at 5 percent in the revised State Budget Plan for 2015 fiscal year. In addition, the government also set rupiah exchange assumption at 12,200 per US dollar, increasing from 11,900. The interest rate for 3-month treasury paper was set at 6.2 percent.

Furthermore, the Indonesian Crude Price (ICP) and assumption was set at US$70 per barrel. The government was also expecting the oil and gas lifting to be at 849,000 barrels and 1.12 million barrels per day, respectively. The assumption for GNP growth remained at 5.8 percent.

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