Jakarta - XINHUA
Indonesia\'s annual inflation accelerated at faster pace in June to 5.9 percent due to food prices hike as the government raised oil price in June, national statistic bureau announced here Monday.
On month, inflation rose 1.03 percent, head of the bureau named only Suryamin said.
\"This indicates that the impact of oil price hike policy has not fully occurred,\" he told a press conference.
\"For year on year 5.9 percent, it is mostly contributed by foods prices after the oil price hikes,\" said Suryamin.
The Indonesian government raised oil price by up to 44 percent on June 22 to ease importation of subdisized-fuel.
The central bank forecast the policy would speed up inflation by up to 7.2 percent this year from the initial target of 3.5 to 5. 5 percent.
Core inflation that exclude oil price and volatile food prices was at 3.14 percent in June, said Suryamin.
\"It is lower than that of 5.9 annual inflation,\" he said.
The bank increased its benchmark interest rate by 25 basis points to 6.0 percent at the beginning of last month on concern of inflation pressure which has weakened rupiah against the U.S. dollar. The bank had kept the rate to a record low of 5.75 percent since February last year.
Finance Minister Chatib Basri said that the risk of the oil price hike would be temporary, about four months.
The central bank expects the economy to expand at 6.4 to 6.8 percent next year.
Deputy Trade Minister Bayu Krisnamurthi has said that the government would accelerate distribution of foods in the vast archipelago country ahead of Islamic fasting month of Ramadhan and Islamoic festivity, in which the food consumption, was regularly soar.