Indonesia Inflation


Inflation stays critically high in August

Consumer prices rose 1.12% over the previous month in August, following the 3.29% increase tallied in July. The increase was mainly driven by higher prices for clothing and foodstuffs.

Annual inflation rose from 8.6% in July to 8.8% in August - the highest level since January 2009. In addition, annual average inflation rose from 5.3% in July to 5.6% in August.

Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 1.01% over the previous month, while annual core inflation rose slightly to 4.5% in August (July: 4.4%).

The Central Bank has an inflation target of 4.5% with a tolerance margin of plus/minus 1.0 percentage points for 2013 and 2014. FocusEconomics Consensus Forecast panellists expect that inflation will come in beyond the tolerance margin and average 6.9% in 2013, which is up 0.3 percentage points from last month's forecast. For 2014, panellists see inflation falling to 5.7%.

Author:, Economist

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Indonesia Inflation Chart

Indonesia Inflation August 2013

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

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