Indonesia Inflation


Indonesia: Inflation eases again in August

September 1, 2014

Consumer prices increased 0.47% over the previous month in August, which was below 0.93% increase tallied in July. August’s increase was driven by higher prices in most categories of the index, with education registering the largest gain due to the start of the new school year. The price for housing and utilities tallied the second highest increase, including higher electricity tariffs.

Annual inflation eased from 4.5% in July to 4.0% in August. The reading was in line with market expectations and represented the lowest reading since January of last year. Annual average inflation decreased from 7.4% in July to 7.1% in August. Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 0.46% over the previous month (July: +0.52% month-on-month). Annual core inflation inched down from 4.6% in July to 4.5% in August.

The Central Bank’s inflation target for 2014 is 3.5%–5.5% and 3.0%–5.0% for 2015. FocusEconomics Consensus Forecast panelists expect that inflation will average 6.1% in 2014, which is unchanged from last month’s forecast. For 2015, panelists see inflation easing to 5.5%.

Author:, Economist

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Indonesia Inflation Chart

Indonesia Inflation August 2014

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

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