Indonesia: Inflation holds steady in April
May 2, 2014
Consumer prices fell 0.02% over the previous month in April, which contrasted the 0.08% increase tallied in March. April's modest decrease was mostly driven by lower prices for foodstuffs as the harvest season is reaching its peak. Prices for clothing were also lower, but price increases in all the other categories helped minimize the overall decline.
Annual inflation held steady at March's 7.3% in April. The reading was broadly in line with market expectations and marked the lowest reading since June 2013. Annual average inflation rose slightly from 7.2% in March to 7.4% in April. Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 0.24% over the previous month (March: +0.21% month-on-month). Annual core inflation inched up from 4.6% in March to 4.7% in April.
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 6.3% in 2014, which is unchanged from last month's forecast. For 2015, panelists see inflation easing to 5.5%.
Author: Carl Kelly, Economist