Indonesia: Inflation jumps in August to highest level in over a year
September 5, 2011
In August, the wholesale price index (WPI) ? India's headline inflation measure ? increased 0.58% over the previous month. The reading virtually matched the 0.59% price increase observed in July (previously reported: +0.65% month-on-month) but overshot market expectations, which had prices rising 0.46%. The increase was mainly driven by higher prices for both food and non-food primary articles, such as flowers, seeds and raw cotton. Despite the relatively moderate monthly price increase, annual headline WPI inflation jumped from 9.2% in July to 9.8% in August, which represents the highest level since July 2010. The significant increase mainly reflected an unfavourable base effect, as prices remained virtually flat in August last year. Meanwhile, the slightly dated consumer price index for industrial workers (CPI-IW) rose 2.18% in July over the previous month, which was more than double the 0.95% increase observed in June. Despite the monthly price increase, annual CPI-IW inflation fell for the third month in a row, down from 8.6% in June to 8.4% in July.