REPUBLIKA.CO.ID, JAKARTA - Indonesia`s inflation rate fell to 0.07 percent in May 2012, which is the second-lowest for the same month in the last six years, according to the Central Statistics Agency (BPS). "The May 2012 inflation is the second-lowest after 2009," said BPS chief Suryamin on Friday.

He stated that the inflation rate was recorded at 0.1 percent in May 2007, 1.4 percent in May 2008, 0.04 percent in May 2009, 0.29 percent in May 2010 and 0.12 percent in May 2011. The statistics suggest that the average inflation rate in May during the last six years has been relatively low, he observed. 

Suryamin added that the inflation rate for May is not high because of the harvest, which causes food prices to decline. "Rice prices are low and production is high due to the harvest. Moreover, the government`s policy to stabilise rice prices has proved effective in containing the inflation rate," he pointed out.

The inflation rate for May 2012 also remained low because the government cancelled its plans to increase the prices of subsidised fuels, he continued. "The plan to raise the prices of subsidised fuels no longer has a psychological effect on the inflation rate. Hopefully, this will stabilise the people`s living costs," he remarked.

The calendar-year inflation rate from January to May 2012 was recorded at 1.15 percent, while the year-on-year inflation rate was 4. 45 percent, he noted. Meanwhile, the core inflation rate reached 0.18 percent, while the year-on-year inflation rate reached 4.14 percent, he added.

The government has set the inflation rate target of 6.8 percent in the revised 2012 state budget, based on the assumption of an increase in the prices of subsidised fuels.

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