In December, consumer prices added 0.92% over the previous month. The figure came in above the 0.60% price rise observed in November as well as market expectations, which had seen prices rising 0.67%. The increase reflected higher prices for food (+2.81% month-on-month) and clothing (+1.08% mom). Due to the pronounced price increase, annual inflation jumped from 6.3% in November to 7.0% in December, the highest rate in 20 months. As a result, annual average inflation also rose from 4.8% in November to 5.1% in December. Despite the high inflation registered in December, the Central Bank left the benchmark rate unchanged at a record low 6.50% at its most recent meeting on 5 January. This mirrored the dovish approach the Bank has taken during its previous 17 meetings and was broadly expected by the market. Despite monetary authorities confirming that the global economic recovery remains on track, concerns about possible debt crisis spillovers in the Eurozone continue to weigh on the market. Although the Central Bank has repeatedly stated its preference to use other monetary instruments to control inflation and capital inflows, the Bank is likely to raise interest rates in the near future due to mounting inflationary pressure. The Central Bank set an inflation target of 5.0% 1% for this year and 4.5% 1% for 2012.
Inflation reaches 20-month high in December
January 3, 2011
Looking for forecasts related to Inflation in Indonesia? Download a sample report now.
Indonesia Economic News
October 17, 2016
Indonesia’s trade surplus rose in September to a 14-month high as imports deteriorated.
October 12, 2016
Retail sales in August expanded 14.4% over the same month last year, according to Bank Indonesia’s Retail Sales Survey (RSS).
October 3, 2016
In September, consumer prices increased 0.22% from the previous month, which contrasted the 0.02% fall recorded in August.
October 3, 2016
The manufacturing Purchasing Managers’ Index (PMI) rose from 50.4 in August to 50.9 in September, according to a release provided by Nikkei and IHS Markit.
September 22, 2016
At its 21–22 September monetary policy meeting, Bank Indonesia decided to cut the BI seven-day Reverse Repo rate (BI seven-day RR rate) from 5.25% to 5.00%.