Analysts said the rate of inflation had put the Indonesian government's full-year inflation target of 20 per cent out of reach, and predicted prices would have risen by 50 per cent or more by the end of the year.
"The threat of hyper inflation is very real, and puts market attention back on the urgency of measures needed to address this," ANZ Investment Bank wrote in a report yesterday. The annual inflation rate accelerated from 18.07 per cent in the previous month as the consumer price index, the key measure of inflation, rose to 255.06 points from 193.59 in February of last year. The monthly change in the index jumped to 12.76 per cent in February from January, compared with January's 6.9 per cent rise from December. Consumer prices rose just 1.07 percent in February of 1997.
Analysts said the government's official figures tend to understate price rises. "This is just the reported figure, can you imagine what it's really like out in the villages?" said Jimmy Koh, a regional economist at Independent Economic Analysis in Singapore. "I was looking at 50 per cent for the full year before this number. Now I'll probably revise it higher."
There was little relief in sight for Indonesia, which has been battered by the 73 per cent decline in the rupiah in the past year, which has cast a light on how much the country has relied on imported goods.
Chicken breeders have gone out of businesses because they can't afford imported chicken feed anymore, drug prices have started to soar and aluminium soda cans, which are made with imported metal, are in short supply.
State electricity company PT Perusahaan Listrik Umum Negara says it cannot afford to pay full price for the coal and natural gas it uses to fire its plants and has warned it could go out of business if the government doesn't allow it to almost double electricity prices soon.
The rising price of power will in turn be reflected in almost every good manufactured here.
In February, food prices rose 16.07 per cent from the previous month, housing prices rose 10.03 per cent, clothing and textile costs rose 15.62 per cent and service and prices of service and trade rose 9.3 per cent.Reuse content