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Indonesia Inflation September 2022

Indonesia: Inflation comes in at highest level since in nearly seven years in September

Inflation came in at 6.0% in September, up from August’s 4.7%. September’s result was the highest inflation rate since October 2015. Looking at the details of the release, prices for food and non-alcoholic beverages accelerated in September. In contrast, prices for housing, water, electricity and household fuels rose at a slower pace compared to the previous month’s reading.

Annual average inflation rose to 3.3% in September (August: 2.9%). Meanwhile, core inflation ticked up to 3.2% in September, from August’s 3.0%.

Finally, consumer prices rose 1.17% over the previous month in September, swinging from August’s 0.21% drop. September’s figure marked the highest reading since December 2014.

Commenting on the impact of September’s inflation figure on the Bank Indonesia’s stance going forward, Nicholas Mapa, Senior Economist at ING, said:

“With inflation now hitting multi-year highs, we expect BI to retain its hawkish tone with a rate hike at the October meeting still a possibility. The core inflation number however could mean that BI would be under less pressure to deliver another punchy (50bp) rate increase with the size of the hike likely dependent on the rupiah’s performance for the month.”

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