Indonesia Inflation


Indonesia: Inflation eases to 18-month low in July

August 4, 2014

Consumer prices in July increased 0.93% over the previous month, which more than doubled the 0.43% increase tallied in June. July’s increase was driven by higher prices in all categories of the index, with foodstuffs registering the largest gain.

Annual inflation eased significantly from 6.7% in June to 4.5% in July. The reading was in line with market expectations and represented the lowest reading since January of last year. The sharp deceleration mostly reflected a high base effect due to an increase in the cost of subsidized fuel last year. Annual average inflation decreased from 7.7% in June to 7.4% in July. Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 0.52% over the previous month (June: +0.25% month-on-month). Annual core inflation inched down from 4.8% in June to 4.6% in July.

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 July 2014

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

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