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.
Author: Carl Kelly, Economist