Consumer Price Index of Indonesia: Modestly Rising Inflationary Pressures in February 2023
While we saw an easing inflation pace for Indonesia in January 2023 (compared to the same month last year), the opposite occurred in February 2023. The country’s Statistical Agency (Badan Pusat Statistik, BPS) reported that inflation reached 0.16 percent month-on-month (m/m) in February 2023, which is higher than the -0.02 percent (m/m) of deflation we saw in the same month one year earlier.
So, what explains relatively high inflation in February 2023? Well, firstly, Indonesia’s economic growth is doing well. The ongoing recovery in purchasing power is then obviously also giving some inflationary pressures.
Secondly, we are now approaching the start of the holy Ramadan month (22 March 2023–21 April 2023), a period when consumption typically peaks (directly followed by the week-long Idul Fitri festivities). It is worth mentioning that when the writer of this article went to the local supermarket to buy a bag of (five-kilogram) rice, the supermarket’s rice stocks had tumbled by around 75-80 percent (which could be related to suddenly jumping demand ahead of the Ramadan month).
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