Indonesia Inflation

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Indonesia: Inflation increases amid fuel subsidy cuts

November 3, 2014

Consumer prices in November increased 1.50% over the previous month, which followed the 0.47% increase tallied in October. November’s increase, the largest since July of last year, was mainly driven by a steep jump in prices for transportation and other services, as well as higher prices for foodstuffs. The increase already reflects the government’s decision in the middle of November to lower fuel subsidies, which led to a threefold increase in prices.

Annual inflation increased from 4.8% in October to 6.2% in November. The reading was just above market expectations of 6.1% and represented the highest reading in five months. Annual average inflation ticked down from 6.5% in October to 6.4% in November and now its sits at the lowest level in a year. Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 0.40% over the previous month (October: +0.27% month-on-month). Annual core inflation increased from 4.0% in October to 4.2% in November.

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 averaging 6.2%, which is up 0.3 percentage points from last month’s projection.


Author:, Economist

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Indonesia Inflation November 2014

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


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