Indonesia Inflation


Inflation surges to the highest level in 4.5 years

Consumer prices rose 3.29% over the previous month in July, following the 1.03% increase tallied in June. The increase was mainly driven by higher prices for food during Ramadan, transport, communications and financial services.

Annual inflation jumped from 5.9% in June to 8.6% in July - the highest level since January 2009. In addition, annual average inflation rose from 5.0% in June to 5.3% in July.

Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 0.99% over the previous month, while annual core inflation rose to 4.4% in July (June: 4.0%).

The Central Bank has an inflation target of 4.5% plus/minus 1.0 percentage points for 2013 and 2014. FocusEconomics Consensus Forecast panellists expect that inflation will remain within the tolerance margin and average 6.6% in 2013, which is up 0.6 percentage points from last month's forecast. For 2014, panellists see inflation at 5.7%.

Author:, Economist

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Indonesia Inflation Chart

Indonesia Inflation July 2013

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

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