Indonesian inflation on the way down.

Indonesia's consumers will welcome an October 5, 2006 move by the country's central bank to trim an additional half percent from the bank's key lending rate. The move led observers to speculate that the country's high inflation would be easing soon.

According to International Monetary Fund (IMF) statistics Indonesia's inflation rate is likely to grow 13.0 percent in 2006, after ballooning 10.5 percent in 2005. The IMF says rate of growth of inflation will decline sharply in 2007 to 5.9 percent.

Reuters reported the rate cut on October 5, 2006, and quoted the central bank's governor as saying, "As long as inflation and risk factors are under control, there is always room for more interest rate cuts, which will be done gradually."

Indonesia's high rate of inflation in 2006 and 2006 might be termed an "extraordinary" development in a set of ordinary company financial statements. The government took the politically brave action of more than doubling fuel costs as prices on international markets began to rise.

The Indonesian economy has now absorbed that price shock setting the stage not only for declining inflation but increased consumer spending as well. Indonesia's growth overall in 2006 has been satisfactory. Second quarter 2006 growth was 5.2 percent and third quarter 2006 growth is expected to be 5.4 percent.