Indonesia's Inflation Rate Eases to 3.60% y/y in April 2016
Indonesia's April deflation of 0.45 percent month-to-month (m/m) was slightly higher than estimated (the general consensus among analysts was 0.29 percent m/m deflation in April 2016). Traditionally, Indonesia experiences deflation in April as food prices ease due to the harvest season. This year, however, deflationary pressure was higher than usual as, per 1 April 2016, Indonesia's premium gasoline and diesel fuel prices were cut by IDR 500 (approx. USD $0.04) per liter, thus curtailing transportation costs. Indonesia's annual inflation rate now stands at 3.60 percent (y/y).
On Monday (02/05) Statistics Indonesia (BPS) released the latest inflation data. The agency stated that the lower fuel prices resulted in a 1.60 percent (m/m) decline in transportation costs in April, while the price of rise (the main staple food for Indonesians) fell 1.2 percent (m/m) due to the harvest season.
Meanwhile, core inflation - which excludes volatile food and administered prices such as subsidized fuel and electricity - eased to 3.41 percent (y/y), from 3.50 percent (y/y) in the preceding month.
In the months ahead inflationary pressures are expected to grow as the Ramadan month (the holy Islamic fasting month) will start in early June. Although this is a month of self-control, consumption on food items (in the early morning or in the evening), clothes, shoes and bags usually increases.
Read more: Heightened Money Circulation due to Ramadan & Idul Fitri
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% | |
| 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% | 0.21% | |
| December | 0.55% | 2.46% | 0.96% | |
| Total | 8.38% | 8.36% | 3.35% |
Source: Statistics Indonesia (BPS)
Inflation in Indonesia and Central Bank Target 2008-2015:
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
| Inflation (annual percent change) |
9.8 | 4.8 | 5.1 | 5.4 | 4.3 | 8.4 | 8.4 | 3.4 |
| Bank Indonesia Target (annual percent change) |
5.0 | 4.5 | 5.0 | 5.0 | 4.5 | 4.5 | 4.5 | 4.0 |
Source: Bank Indonesia