Wibowo also confirmed that - if subsidized fuel prices are not raised this year - the government of Indonesia can meet its inflation target, which is set at 5.5 percent in the 2014 State Budget. However, if the government decides to increase these prices, inflation can accelerate to 8 percent by the year-end. After the subsidized fuel price hike in June 2013, inflation rose rapidly and ended at 8.4 percent in December 2013.

Low inflation is also important in the context of poverty eradication. The government aims to curb the nation's poverty rate to 10.5 percent at the year-end. This target can be met if inflation is kept around 5.5 percent in 2014. The country's gross domestic product (GDP) growth is estimated at 5.7 percent, slightly lower than last year's result.

Inflation in Indonesia:

Month  Monthly Growth
          2013
 Monthly Growth
          2014
January          1.03%          1.07%
February          0.75%          0.26%
March          0.63%  
April         -0.10%  
May         -0.03%  
June          1.03%  
July          3.29%  
August          1.12%  
September         -0.35%  
October          0.09%  
November          0.12%  
December          0.55%  
Total          8.38%          1.33%
    2008   2009   2010   2011   2012   2013
Inflation
(annual percent change)
   9.8    4.8    5.1    5.4    4.3    8.4

Source: Statistics Indonesia

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