Indonesia Inflation


Inflation stable in August

In August, consumer prices rose 0.95% over the previous month, which was above the 0.70% increase tallied in July and marked, in fact, the largest monthly gain in over two years. The reading mainly reflected higher food prices. Despite the monthly price increase, annual inflation remained unchanged at July's 4.6%, which was above market expectations of 4.4%. Moreover, annual average inflation remained stable at 4.2% in August. Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 0.97% over the previous month, driving annual core inflation down to 4.2% in August. The Central Bank has an inflation target of 4.5% plus/minus 1.0 percentage points for 2012 and 2013.

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