Statistics Indonesia (BPS) stated that lower (food) commodity prices included red/green chilies (pepper), chicken meat, and eggs. Also lower electricity tariffs and fuel prices contributed to Indonesia's October deflation.

Calendar year inflation slowed to 2.16 percent. Indonesia's central bank (Bank Indonesia) targets inflation in the range of 3 to 5 percent (y/y) in 2015. Provided no inflationary shocks emerge in the last two months of 2015, inflation realization may fall slightly below Bank Indonesia's target range.

For an analysis and overview of inflation in Indonesia, visit our Consumer Price Index page.

Inflation in Indonesia:

Month  Monthly Growth
          2013
 Monthly Growth
          2014
 Monthly Growth
          2015
January          1.03%          1.07%         -0.24%
February          0.75%          0.26%         -0.36%
March          0.63%          0.08%          0.17%
April         -0.10%         -0.02%          0.36%
May         -0.03%          0.16%          0.50%
June          1.03%          0.43%          0.54%
July          3.29%          0.93%          0.93%
August          1.12%          0.47%          0.39%
September         -0.35%          0.27%         -0.05%
October          0.09%          0.47%         -0.08%
November          0.12%          1.50%
December          0.55%          2.46%
Total          8.38%          8.36%          2.16%

Source: Statistics Indonesia (BPS)


Inflation in Indonesia 2008-2014:

     2008    2009    2010    2011    2012    2013    2014
Inflation
(annual percent change)
    9.8     4.8     5.1     5.4     4.3     8.4     8.4

Source: World Bank

Manufacturing Activity Indonesia

Meanwhile, Indonesia's manufacturing activity continued to contract in October, mainly on a sharp fall in new orders (from abroad). It was the 13th consecutive month in which Indonesia's manufacturing sector contracted. According to the latest survey from Nikkei, released today (02/11), Indonesia's October manufacturing purchasing managers' index (PMI) stood at 47.8 (a reading below 50.0 indicates contraction).

Indonesia - Purchasing Managers' Index (PMI):

Due to weak new orders it is difficult for Indonesian manufacturing companies to absorb labor, Markit Economist Pollyanna De Lima said. Moreover, although the rupiah has strengthened in recent weeks (against the US dollar), imports of raw materials are still costly. The Indonesian rupiah has depreciated 10 percent against the greenback so far this year.

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia

To end on a positive note, Indonesia's October manufacturing PMI improved from the reading of 47.4 in the preceding month.

Foreign Visitor Arrivals into Indonesia

BPS also announced that Indonesia's foreign tourist arrivals increased 9.84 percent (y/y) to 869,179 in September 2015.

In the January-September 2015 period, foreign visitor arrivals to Indonesia rose 3.5 percent to 7.2 million people. However, this pace is not enough to meet the government target of welcoming 10 million foreign tourists in Indonesia in full-year 2015.

For a detailed overview and analysis of Indonesia's tourism industry (which includes government targets and policy changes), visit our Tourism Industry page.

Foreign Tourist Arrivals in Indonesia, 2013-2015:

Month  Tourist Arrivals
         2013
 Tourist Arrivals
         2014
 Tourist Arrivals
         2015
January        614,328        753,079        723,039
February        678,415        702,666        786,653
March        725,316        765,607        789,596
April        646,117        726,332        749,882
May        700,708        752,363        793,499
June        789,594        851,475        815,148
July        717,784        777,210        814,233
August        771,009        826,821        850,542
September        770,878        791,296        869,179
October        719,900        808,767
November        807,422        764,461
December        766,966        915,334
Total       8,802,129       9,435,411       7,191,771


Foreign Tourist Arrivals in Indonesia, 2007-2015:

    2007   2008   2009   2010   2011   2012   2013   2014  2015
Foreign Tourists
(in millions)
  5.51   6.23   6.32   7.00   7.65   8.04   8.80   9.44  10.0¹

¹ indicates government target
Source: Statistics Indonesia (BPS)

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