Indonesia: Inflation moderates in January
February 1, 2021
Consumer prices rose a seasonally-adjusted 0.26% over the previous month in January, decelerating from December's 0.45% increase, which had marked the sharpest rise in prices since May 2018. January's result was driven largely by higher prices for food, beverages and tobacco.
Inflation moderated to 1.6% in January, from December’s 1.7%. January’s result therefore moved further below Bank Indonesia’s 2.0%–4.0% target range. Meanwhile, the trend pointed down slightly, with annual average inflation coming in at 1.9% in January (December: 2.0%). Core inflation came in at 1.6%, matching December’s reading.
Below-target inflation in recent months will likely encourage Bank Indonesia to maintain an accommodative monetary stance ahead. Our panelists see inflation rising back to target next year as the economy recovers.