Indonesia: Inflation recedes in January as falling global oil prices offset impact of fuel subsidy cuts
February 2, 2015
Consumer prices decreased 0.24% in January over the previous month, which contrasted sharply the 2.46% increase tallied in December. January’s reading, the lowest since September 2013, was driven by a steep decline in prices for transportation and other services. The decrease reflects the steep fall in global oil prices, which has offset the increase in prices caused by the government’s decision in November of last year to lower fuel subsidies.
Annual inflation receded from 8.4% in December to 7.0% in January. The reading was below market expectations of 7.5%. Annual average inflation inched down from 6.4% in December to 6.3% in January. Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 0.61% over the previous month (December: +1.02% month-on-month). Annual core inflation inched up from 4.9% in December to 5.0% in January.
Author: Carl Kelly, Economist