INFLATION PROJECTION

Apparently, inflation during the month of February is not running as fast as last month. Bank Indonesia (BI) project, the rate of inflation in February 2010 was only in the range 0.3% to 0.4% or lower than in January, which reached 0.84%. BI Deputy Governor Hartadi A. Sarwono said, there are at least two factors that cause inflation in February was not going too fast.

First, the price of rice began to fall because it was entering the harvest and distribution of rice to poor people working smoothly.

Second, the rupiah continued to strengthen against the U.S. dollar, helping push the inflation rate. So, we expect inflation lower in February than in January, said Hartadi.

Hartadi expected, global economic conditions are also more stable in this tiger year. So overall this year inflation is still within range, ie 4% to 6%. Although no increase in fuel prices (fuel) and electricity basic tariff (TDL) this year, Finance Minister Sri Mulyani Indrawati said the government still will change the inflation target in the 2010 state budget, from the previous 5.5% to 5.7 %. These revisions will be filed in the State Budget 2010 changes.

But according to the Head of the Central Statistics Agency (BPS) Rusman Heriawan, the government actually does not need to change the inflation target, not sure if it will pull the price of fuel and TDL. The important thing is the government reduce the price of basic commodities, especially rice prices. If there is economic recovery and rising prices, inflation 5.5% to maintain a very heavy, Rusman said.

State Budget Increase Rp 59.3 Trillion, our state budget this year increased as much as Rp 59.3 trillion to Rp 1107 trillion from the previous only Rp 1047.7 trillion. A total of Rp 44 trillion of which will be allocated for additional budget for subsidies, both energy and non-energy.

Minister of Finance (Finance) Sri Mulyani Indrawati said, additional budget to subsidize the most energy subsidies flowing. That is, the additional fuel subsidy amounting to Rp 20.1 trillion, which increased to Rp 88.8 trillion from Rp 48.6 trillion. Then additional electricity subsidy Rp 16.7 trillion to Rp 54.4 trillion. While the budget an additional non-energy subsidies for fertilizer subsidies flowing to Rp 4.4 trillion and Rp 2.8 trillion food.

Coordinating Minister Hatta Rajasa said the economy, budget extra fuel and electricity subsidies large enough because the government decided not to raise fuel prices and electricity basic tariff (TDL). Thus subsidies rise, he said after a cabinet meeting on the 2010 Budget changes. End of the additional budget, the finance minister revealed, the deficit swelled from the initial APBM only Rp 98 trillion, or 1.6% of gross domestic product (GDP) to Rp 132.2 trillion, or 2.1% of GDP. But, down from its original plan budget changes, namely by 2.2%.

To cover the increasing budget deficit, the government will use the remaining budget of more financing (Silpa) in 2009 amounted to Rp 38 trillion. Then there is the addition of new debt of Rp 1.2 trillion, Indrawati said. Not only the State and deficit spending, the government also changed some macroeconomic targets. That is, inflation rose to 5.7% which was initially only 5.5%. Then, the interest of Bank Indonesia Certificates (SBI) three-month period from 6.5% to 7%.

Exchange rate assumptions also changed from Rp 10,000 per U.S. dollar was Rp 9500 per U.S. dollar. And, the price of Indonesian crude oil to U.S. $ 77 per barrel from the previous U.S. $ 65 only sebarel. Another factor that has not changed, such as oil lifting target, which is 965,000 barrels per day. But, then Coordinating Minister for Economic Affairs, Minister of Energy and Mineral Resources, and Minister for the Environment will conduct further discussions on the impact of the possibility of lifting down to 50%, since enactment of the Environment, said the Minister of Finance.

The government auctioned off three series SUN worth USD 4 Trillion, the Government will re-auctioning the debt of the State (SUN) to meet the target of state budget financing in 2010. The plan, the government will auction off SUN on March 2, 2010. Director General of Debt Management Rahmat Waluyanto Ministry of Finance said it will auction three series of debt securities, with an indicative value of Rp 4 trillion. SUN who has auctioned a nominal per unit of Rp 1 million.

The three series of debt was auctioned NES 20110303 (Reopening) with the discount interest payments and maturing on March 3 2011.Kemudian series FR0027 (Reopening) fixed rate (fixed rate) of 9.50% and maturity date of 15 June 2015. Coupon payments made each June 15 and December 15. Finally, the series FR0052 (Reopening) with a fixed interest rate of 10.50% and maturity date of August 15, 2030. Kuponnya payments made every year on February 15 and August 15.