Suhariyanto, Head of BPS, explained that Indonesia's January inflation was particularly caused by rising rice prices (contributing 0.24 percent to last month's inflation rate). Therefore, volatile food inflation was recorded at 2.58 percent (y/y) in January 2018.

Not only prices of rice, but also several other food items recorded inflation, including chicken meat (0.07 percent m/m), fresh fish (0.05 percent m/m), cayenne pepper (0.04 percent m/m), and vegetables (0.01 percent m/m). However, not all food items contributes to inflation. For example, prices of chicken eggs and red onions both deflated by 0.01 percent (m/m).

In addition to foodstuffs, inflation also occurred in the group of processed food products, cigarettes, and tobacco (tobacco inflation is due to the increase in the cigarette excise tax, effective per 1 January 2018).

Still, Indonesian inflation in January 2018 was lower compared to January 2017 when a 0.97 percent (m/m) inflation pace was determined. Last year, inflation had risen more steeply due to administered price adjustments (to wit: electricity tariffs, fuel prices and vehicle registration fees). This year, on the contrary, administered prices deflated 0.15 percent (m/m) in January.

Inflation in Indonesia:

Month M/M Growth
      2018
January      0.62%
Year-to-Date      0.62%


Headline Consumer Price Index of Indonesia:

Month M/M Growth
      2013
M/M Growth
      2014
M/M Growth
      2015
M/M Growth
      2016
M/M Growth
      2017
January      1.03%      1.07%     -0.24%      0.51%      0.97%
February      0.75%      0.26%     -0.36%     -0.09%      0.23%
March      0.63%      0.08%      0.17%      0.19%     -0.02%
April     -0.10%     -0.02%      0.36%     -0.45%      0.09%
May     -0.03%      0.16%      0.50%      0.24%      0.39%
June      1.03%      0.43%      0.54%      0.66%      0.69%
July      3.29%      0.93%      0.93%      0.69%      0.22%
August      1.12%      0.47%      0.39%     -0.02%     -0.07%
September     -0.35%      0.27%     -0.05%      0.22%      0.13%
October      0.09%      0.47%     -0.08%      0.14%      0.01%
November      0.12%      1.50%      0.21%      0.47%      0.20%
December      0.55%      2.46%      0.96%      0.42%      0.71%
Total      8.38%      8.36%      3.35%      3.02%      3.61%

Source: Statistics Indonesia (BPS)

Inflation in Indonesia and Central Bank (BI) Target:

  2014 2015 2016 2017 2018
Inflation
(annual % change)
 8.4  3.4  3.0  3.6
BI Target
(annual % change)
 4.5  4.0  4.0  4.0  3.5

 

  2008 2009 2010 2011 2012 2013
Inflation
(annual % change)
 9.8  4.8  5.1  5.4  4.3  8.4
BI Target
(annual % change)
 5.0  4.5  5.0  5.0  4.5  4.5

Source: Bank Indonesia

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