Indonesia: Inflation continues to moderate in February
March 1, 2012
In February, consumer prices rose a modest 0.05% over the previous month, which was only a fraction of the 0.76% increase tallied in January. Prices for housing as well as for clothing rose over the previous month, more than offseting a decline in food prices, the largest component of the consumer price index. Annual inflation fell for the sixth consecutive month, inching down from 3.7% in January to 3.6% in February. The figure undershot market expectations of 3.8% and marked, in fact, the slowest pace of inflation seen since March 2010. Inflation has been slowing since January 2011, with the exception of a seasonal spike in August last year, thereby giving Bank Indonesia leeway for adopting a more accommodating monetary policy stance in recent months. The Central Bank has an inflation target of 4.5% 1% for 2012 and 2013.