Indonesia Inflation August 2016


Indonesia: Inflation falls to over-six-year low in August

September 1, 2016

In August, consumer prices decreased 0.02% over the previous month, which contrasted the 0.69% rise recorded in July. According to Statistics Indonesia, August’s reading came mainly on the back of lower prices for foodstuffs as well as transport, communications and financial services.

Inflation fell from 3.2% in July to 2.8% in August, which marked the lowest reading since December 2009. The reading came in below the 3.0% that market analysts had expected. Meanwhile, annual average inflation fell from 4.6% in July to 4.2% in August. Core consumer prices, which exclude volatile items such as food and administered prices, increased 0.36% over the previous month (July: +0.34% month-on-month). Core inflation eased from July’s 3.5% to 3.3% in August.

The Central Bank’s inflation target for 2016 is 3.0%–5.0%. FocusEconomics Consensus Forecast panelists expect that inflation will average 4.0% in 2016, which is down 0.1 percentage points from last month’s forecast. For 2017, panelists see inflation averaging 4.6%.

Author: Angela Bouzanis, Lead Economist

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Indonesia Inflation Chart

Indonesia Inflation August 2016

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

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