Indonesia's High Rainfall Can Lead to Inflationary Pressures in January

Traditionally in the first month of the year, heavy rainfalls plague certain areas of Indonesia, particularly parts of Java, Kalimantan and Sumatra as the rainy season hits its peak. These weather conditions cause social problems as tens of thousands of people need to relocate as well as economic turmoil due to disrupted harvests and logistic trouble amid bad connectivity. Governor of Indonesia's central bank (Bank Indonesia), Agus Martowardojo, stated that the current weather conditions may result in higher inflationary pressures in January.

The high rainfall is expected to lead to a disruption of the country's food supply. However, Martowardojo also said that this year's inflationary pressures in January will not be as high as in the same month last year (1.03 percent). A first-week survey of Bank Indonesia indicated that January's inflation rate in 2014 will be lower than the average January inflation rate of the last five years.

2013    Inflation
January      1.03%
February      0.75%
March      0.63%
April     -0.10%
May     -0.03%
June      1.03%
July      3.29%
August      1.12%
September     -0.35%
October      0.09%
November      0.12%
December      0.55%
Total      8.38%
    2008   2009   2010   2011   2012   2013
Inflation
(annual percent change)		    9.8    4.8    5.1    5.4    4.3    8.4

Source: Statistics Indonesia


Further Reading:

• Low Indonesian Inflation Rate Expected to Continue into January 2014
• Analysis of Inflation in Indonesia


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