REPUBLIKA.CO.ID, JAKARTA -- Inflation in January and February 2015 can be high although the government has lowered the prices of premium gasoline and diesel oil by Rp900 and Rp250 per liter respectively, an observer said.

Inflation will be boosted by, among other factors, disturbances in goods distribution due to prolonged rains that have caused floods in some regions, economic observer Denni Puspa Purbasari of the University of Gajah Mada noted here on Friday (2/1).

She remarked that the high rainfall will also disturb the production of essential commodities such as chili and will cause their prices to increase.

"We fear that the supply of commodities will be disturbed. Besides that, adjustments in goods and transportation fares will not happen automatically even though the government has lowered the fuel prices," she pointed out.

According to the Central Bureau of Statistics (BPS) data, the annual inflation rate of 2014 had been boosted by a rise in fuel prices, electricity tariffs, and transportation fares.

While transportation tariff hike contributed 0.63 percent to inflation, rise in the prices of red chili and rice contributed 0.43 percent and 0.38 percent, respectively.

Three kinds of tariffs will still be high at the beginning of 2015 as the decline in fuel oil prices cannot automatically affect transportation fares and the prices of essential goods, which have gone up due to the fuel price hikes last November.

Indonesia has succeeded in bringing its inflation down to 8.36 percent in 2014 despite a recent cut in energy subsidies.

Inflation in 2014 fell from the 8.38 percent in 2013, which is relatively high because of the fuel oil price rise caused by subsidy cuts, head of BPS Suryamin said here on Friday.

Suryamin attributed the inflation to fluctuations in commodity prices saying gasoline contributed 1.04 percentage points to the increase.

Other main contributors to inflation included electricity (0.64 percentage point), city transport (0.63 point), red pepper (0.43 point), rice (0.38 point) and household fuel (0.37 point).

In December alone, inflation was 2.46 percent on-month as a result of the fuel oil price hike in November 2014.

Core inflation in December 2014 was recorded at 1.02 percent and core inflation on-year was 4.93 percent.

The largest contributor to inflation in December included the transport sector, communications, and financial services, accounting for 5.55 percentage points, and food products accounting for 3.22 percent.

The highest inflation in December was recorded by Merauke, Papua, at 4.53 percent.

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