REPUBLIKA.CO.ID, JAKARTA - Indonesian government does not expect the inflation in August accelerate to 0.95 percent as they predicted it to be at least 0.6 to 0.7 percent. "It is beyond my expectation," said Minister of Finance Agus Martowardojo on Monday.

The higher inflation was caused by the increasing service and goods demand in Ramadhan. Yet, Minister Agus said the inflation during Ramadhan and Eid al-Fitr still be maintained below five percent. He reminded related ministries and institutions to study the surge to prevent it in the future.

Central Statistics Agency (BPS) notes the inflation on Ramadhan and Eid al-Fitr was surging to 0.95 percent. Head of BPS, Suryamin, mentioned that the highest inflation rate was seen in Samarinda of East Kalimantan with 2.29 percent and Palu of Central Sulawesi with 2.81 percent.

Transportation costs, in demand due to homecoming in Eid al-Fitr, are the largest contribution of inflation, which is 0.1 percent. Even the airfare rose to 14.78 percent.

Standard Chartered economist Fauzi Ichsan predicted the inflation rate until the end of the year was in 4.5 percent. "As long as the price of the fuel is not increased, the inflation can be maintained. Or else, the inflation will reach seven percent next year," he said.

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