Indonesia's Inflation Trend in February 2014: Easing or Accelerating?

However, Governor of Indonesia's central bank, Agus Martowardojo, recently said that due to the domestic weather conditions and other natural disasters (volcano eruption on Sumatra and high waves at sea), inflation in February 2014 may accelerate compared to January's 1.07 percent result. In his opinion, inflation will ease more markedly in the second quarter of this year. Traditionally, Indonesia has relatively low inflation figures in the period March to June.

Wibowo further stated that inflationary pressures in Indonesia usually tend to peak in two periods, i.e. December-January and July-August. In the December-January period, inflationary pressures are brought about by Christmas and New Year celebrations as well as (a peak of) the rainy season in January (which can result in floods). In the July-August period, inflationary pressures emerge as a result of the holiday period, the holy Muslim fasting month, Idul Fitri celebrations and the arrival of the new school year.

Inflation in Indonesia:

Month	Monthly Growth	Monthly Growth
January	1.03%	1.07%
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%	1.07%

	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}

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