Full-year inflation to fall below 3 percent: B 

Wednesday, 2 December 2009

The Jakarta Post

The central bank said Wednesday that full-year inflation in 2009 would be less than 3 percent, after the Central Statistics Agency (BPS) announced lower-than-expected year-on-year inflation in November of 2.4 percent.

"We estimate inflation will be between 2.9 and 3 percent," Bank Indonesia Acting Governor Darmin Nasution said after addressing an investor forum in Jakarta.

Darmin had told the investors that BI had kept its policy rate at 6.5 percent despite the low inflation, as it expected inflation to soar to more than 5 percent next year as the economy recovered.

"Our estimate is 5 percent, give or take 1 percent, but with an upward bias. [It] may reach about 5.5 percent," he said, adding the current BI rate was at the appropriate level to deal with expected inflation.

The central bank said the economy would expand by between 4 and 4.5 percent this year.