Indonesia Inflation

Indonesia

Indonesia: Inflation jumps up again in December amid impact of fuel subsidy cuts

January 2, 2015

Consumer prices in December increased 2.46% over the previous month, which followed the 1.50% increase tallied in November. December’s increase, the largest since July of 2013, was mainly driven by a steep jump in prices for transportation and other services, as well as higher prices for foodstuffs. The increase reflects the government’s decision in the middle of November to lower fuel subsidies, which led to a threefold increase in prices.

Annual inflation jumped from 6.2% in November to 8.4% in December. The reading was above market expectations of 7.9% and represented the highest reading since February 2009. Annual average inflation in December held at November’s 6.4%. Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 1.02% over the previous month (November: +0.40% month-on-month). Annual core inflation increased from 4.2% in November to 4.9% in December.

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 6.6% in 2015, which is up 0.4 percentage points from last month’s forecast. For 2016, panelists see inflation averaging 4.9%.


Author:, Economist

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Indonesia Inflation December 2014

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


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