Consumer Price Index Indonesia: FY 2016 Inflation at 3.02%
According to the latest data from Indonesia's Statistics Agency (BPS), full-year inflation reached 3.02 percent in 2016, just within the 3 - 5 percent year-on-year (y/y) target range that was set by the central bank of Indonesia (Bank Indonesia). The 3.02 percent growth was the lowest annual inflation figure of Indonesia since 2012. In December 2016 Indonesia's consumer price index rose by 0.42 percent month-to-month (m/m), one of the lowest monthly (December) growth paces over the past decade.
Indonesia's 3.02 percent (y/y) inflation figure in full-year 2016 is a comfortable one that shows food prices and administered prices have been relatively stable over the past 12 months. However, low inflation could also be a sign that people's purchasing power has weakened. In December inflation only rose 0.42 percent (m/m), a very low figure considering consumers are traditionally shopping ahead of - and amid - Christmas and New Year celebrations. Therefore, Indonesian inflation tends to show a peak in the December-January period (and there occurs another peak in the June-August period due to Ramadan, Idul Fitri celebrations and the start of the new school year).
However, Indonesia's gross domestic product is expected to accelerate in 2016 after a five-year slowdown. This should manage to boost purchasing power in Indonesia.
Indonesia's core inflation, which excludes administered and volatile food prices, remained at 3.07 percent (y/y) in December 2016, unchanged from the preceding month.
Several advanced economies, such as the USA, European Union and Japan, have been injecting a lot of stimulus in domestic economies to boost inflation. For Indonesia, however, a 3 percent (y/y) pace is very mild.
Inflation in Indonesia:
| Month | Monthly Growth 2013 |
Monthly Growth 2014 |
Monthly Growth 2015 |
Monthly Growth 2016 |
| January | 1.03% | 1.07% | -0.24% | 0.51% |
| February | 0.75% | 0.26% | -0.36% | -0.09% |
| March | 0.63% | 0.08% | 0.17% | 0.19% |
| April | -0.10% | -0.02% | 0.36% | -0.45% |
| May | -0.03% | 0.16% | 0.50% | 0.24% |
| June | 1.03% | 0.43% | 0.54% | 0.66% |
| July | 3.29% | 0.93% | 0.93% | 0.69% |
| August | 1.12% | 0.47% | 0.39% | -0.02% |
| September | -0.35% | 0.27% | -0.05% | 0.22% |
| October | 0.09% | 0.47% | -0.08% | 0.14% |
| November | 0.12% | 1.50% | 0.21% | 0.47% |
| December | 0.55% | 2.46% | 0.96% | 0.42% |
| Total | 8.38% | 8.36% | 3.35% |
3.02% |
Source: Statistics Indonesia (BPS)
Inflation in Indonesia and Central Bank (BI) Target 2008-2016:
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |
| Inflation (annual % change) |
9.8 | 4.8 | 5.1 | 5.4 | 4.3 | 8.4 | 8.4 | 3.4 | 3.0 |
| BI Target (annual % change) |
5.0 | 4.5 | 5.0 | 5.0 | 4.5 | 4.5 | 4.5 | 4.0 | 4.0 |
Source: Bank Indonesia
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