Indonesia: Inflation stays critically high in August
September 2, 2013
Consumer prices rose 1.12% over the previous month in August, following the 3.29% increase tallied in July. The increase was mainly driven by higher prices for clothing and foodstuffs.
Annual inflation rose from 8.6% in July to 8.8% in August - the highest level since January 2009. In addition, annual average inflation rose from 5.3% in July to 5.6% in August.
Meanwhile, the core inflation index, which excludes volatile items such as food and administered prices, increased 1.01% over the previous month, while annual core inflation rose slightly to 4.5% in August (July: 4.4%).
The Central Bank has an inflation target of 4.5% with a tolerance margin of plus/minus 1.0 percentage points for 2013 and 2014. FocusEconomics Consensus Forecast panellists expect that inflation will come in beyond the tolerance margin and average 6.9% in 2013, which is up 0.3 percentage points from last month's forecast. For 2014, panellists see inflation falling to 5.7%.
Author: Carl Kelly, Economist