Indonesia: Inflation holds steady in January
February 3, 2014
Consumer prices rose 1.07% over the previous month in January, which was much higher than 0.36% increase tallied in December. January's increase was primarily driven by higher prices for foodstuffs that resulted from disruptions to supply chains following a period of heavy rain and flooding.
Annual inflation held at December's 8.2% in January. In the full year 2013, inflation was 7.0%, which was well above the 4.3% recorded in 2012 and represents the highest level since 2008. Annual average inflation rose from 6.9% in December to 7.3% in January. Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 0.56% over the previous month (December: -0.18% month-on-month). Annual core inflation inched up from 4.3% in December to 4.5% in January.
The Central Bank's inflation target is 3.5%-5.5% for 2014 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