::Potential Deflation in February>>

Go Finance Reporting in JAKARTA - The government is optimistic during February 2011 there will be deflation because it supported continued decline in food prices, particularly rice.

Coordinating Minister Hatta Rajasa said, the decline in rice prices is expected to be a contributor to the occurrence of deflation in February. Hatta also estimates, the decline in rice prices will occur in March 2011 supported the main harvest in areas of rice supply.

"We're optimistic that there will be deflation in food," said Hatta in Jakarta.

However, some economic observers are still going to happen inflation rate in February. Inflation in February 2011 is expected to be 0.3 to 0.5 percent figure. "Our projections month on month (month to month) of 0.37 percent and year to year (year on year / yoy) amounted to 7.09 percent," said Chief Economist of the Investment Funds Institute Purbaya Yudhi Sadewa.

He said the inflation projection will tend to be lower when compared with previous months are elevated due to volatile prices of food and oil prices. "February tends to be lower until the end of March, and April is likely that prices will continue to fall and the potential for deflation," he said.

Mandiri Securities chief economist Destry Damayanti estimates, inflation in February will be on the level of 0.4 percent so as to be touching 7.12 per cent yoy. Inflation is mainly processed food sector which is one of consumption.

"The high inflation in food raw materials began to be transmitted in food. In addition, the increase in drug prices also affect inflation, "he said.

One of the curb inflation so as not to squirm too deep is the strengthening of the rupiah during February. (GoFinance)