Indonesia Inflation July 2016


Inflation eases in July

In July, consumer prices increased 0.69% over the previous month, which was slightly higher than the 0.66% rise recorded in June. According to Statistics Indonesia, July’s reading came mainly on the back of higher prices for foodstuffs as well as transport, communications and financial services.

Inflation fell from 3.5% in June to 3.2% in July, which marked the lowest reading since November 2009. The reading came in below the 3.4% that market analysts had expected. Meanwhile, annual average inflation fell from 4.9% in June to 4.6% in July. Core consumer prices, which exclude volatile items such as food and administered prices, increased 0.34% over the previous month (June: +0.33% month-on-month). Core inflation was steady at June’s 3.5% in July.

The Central Bank’s inflation target for 2016 is 3.0%–5.0%. FocusEconomics Consensus Forecast panelists expect that inflation will average 4.1% in 2016, which is down 0.1 percentage points from last month’s forecast. For 2017, panelists see inflation averaging 4.7%.

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Indonesia Inflation Chart

Indonesia Inflation July 2016

Note: Annual and monthly variation of consumer price index in %.
Source: Statistics Indonesia (BPS) and FocusEconomics calculations.

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