GOVT OPTIMISTIC INFLATION UNDER CONTROL

Jakarta, Jan 26 (ANTARA) - Finance Minister Sri Mulyani Indrawati expressed her optimism on Tuesday that inflation in January would remain under control but she also called for a continuous watch on the rice price hike.

"We have seen the price movements and it seems only the price of rice that has to be continuously monitored," she said.

She admitted that the contribution of rice price in the inflation was still quite big, adding that the price of other commodities remained stable.

"The contribution of rice price to inflation is still quite big. Other than that I think it all remains stable," she said.

The minister was also optimistic the annual inflation in January this year would still be below 3.0 percent.

"Annually, it is probably still below 3.0 percent," she said.

The central bank's senior deputy governor, Darmin Nasution, earlier said the rate of inflation in the past two weeks was higher than normally it was.

"Actually, in the past two weeks it is a bit higher than it is normally," he said.

Danareksa Institute economist, Purbaya Yudhi Setiawan, meanwhile predicted the rate of inflation in January 2010 would reach 0.6 percent with the rice price hike being its main contributor.

He said the rate of inflation in January 2010 would be higher than it was before due to the rice price hike. The rate of inflation in December 2009 reached 0.33 percent.

He said the price of rice was affected much by the harvest season. If the harvest is late the price will rise, he said.