GOVT TO STUDY TRIGGERS OF FEBRUARY INFLATION

By Andi Abdussalam

Jakarta, March 3 (Antara) - The country's high inflation rate last February, the highest one in the same month over the past ten years, surprised the government.          Recorded at 0.75 percent, the February inflation is far higher than the government's estimate at between 0.3 and 0.4 percent.          "I have predicted that inflation would be high because it was usually high in the months of January and February. But the inflation rate last February was beyond expectation, reaching 0.75 percent." Chief economic minister Hatta Rajasa said.          The Central Bureau of Statistics (BPS) has announced that the inflation in February was the highest one ever recorded in the same month over the past ten years. It reached 0,75 percent.      "The inflation in February was the highest in the last ten years," BPS  Suryamin said.          Hatta Rajasa said on Sunday that the government will discuss and study what had became the trigger of the inflation.      "Usually, the inflation is high in January and February, not because it is not under control but because it has been a fact that inflation is always high during that period, usually due to the volatility of food prices. This time, however, the inflation is beyond expectation," Hatta said.            Hatta said that each time the prices were on the rise, particularly essential goods prices, the government intervened in the market. "But it is difficult to intervene in the market if the  hikes are prices of horticulture products," he said.          Acting chief of the Fiscal Affairs of the Finance Ministry Bambang Brodjonegoro has suspected that the government's policy banning the importation of horticultural products was one of the triggers of the high inflation in February.          Indonesia implemented an import restriction on horticulture products under a Trade Ministry regulation last year.  Under a revised Food Law passed last year, Indonesia was also seeking to increase self-sufficiency in food crop and meat.          And, as per January-June 2013, the government has imposed a ban on the importation of durian, banana, pineapple and a restriction on the importation of melon, mango, papaya, potatoes, cabbage, carrots, peppers, orchids, chrysanthemums and heliconia flowers in an effort to protect local growers and boost the country's horticultural production.          "Probably it was the effect of the prices of a number of food commodities whose importation was restricted so that all fruit and meat commodities became expensive," Bambang Brodjonegoro said.          Therefore, he said, the government needs to issue a policy in an effort to lower inflation. The ministry of agriculture should also be asked to analyze the impact and effectiveness of the government's import restriction policy.          "The agriculture ministry should pay attention to it and should not merely focus on the goal of self-sufficiency in food products. It should also look at the situation when prices are on the rise and would affect the people as whole," he said.           Bambang said the high inflation rates in the past two months had disturbed the purchasing power of the people, hoping that the conditions would not happen in the coming months.          "We hope that inflation could be neutralized next March and next April. In general, the high inflation has been triggered by the import restriction where the domestic needs are not taken into account," he added.          Earlier, Finance Minister Agus Martowardojo said the inflation rate in February unexpectedly reached 0.75 percent. it was beyond the government estimate at between 0.3 and 0.4 percent.          "The 0.7 percent level is above our estimate. This should be studied to see the major trigger of the high inflation. I suspected that it was triggered by something relating to food supply," the finance minister said.          Agus said that the government and the central bank (Bank Indonesia/BI)would further study the triggers of the high inflation, which caused the calendar year inflation to reach 1.79 percent.          "We will analyze it together with Bank Indonesia so that we would make an accurate response. The 1.7 percent inflation in the past two months was high," the finance minister said.          Therefore, government will make efforts to control inflation and supply of horticultural products so that the inflation rate would not increase too high and threaten national economy, Hatta Rajasa said meanwhile.          The chief economic minister said on Sunday that food, particularly rice, had no significant contribution to the inflation but it seems that horticultural products had. This needs to be discussed with the relevant institutions.          "I have met with the trade minister and we agreed to take control efforts. We will held a meeting again on Wednesday (March 6 ) to discuss supply and demand," the minister said.          The government will conduct a comprehensive assessment to see what had triggered the inflation but he did not make it clear whether the policy on the restriction of  the importation of horticultural products would also be discussed.          "We will see it from the aspect of demand and supply. We would still protect our farmers so that they would continue to produce for our needs. We are afraid the inflation has been boosted by rising demand but declining supply," he said.          He however said that in order to control horticultural product supply, import can just be carried out if necessary.          "We should not be too protective to import when prices are too high because inflation would adversely burden (the economy)," he said.          But import policy should not either harm domestic products. "High inflation would cost a lot to the people's spending," he added.***3*** (T.A014/b003/B003) (T.A014/A/A. Abdussalam/Bustanuddin) 03-03-2013 20:40: