In line with expectations, Indonesia’s inflation rate accelerated in August 2019. While the month of August normally brings mild deflation to Southeast Asia’s largest economy in the aftermath of the Ramadan and Idul Fitri celebrations (a period when demand for food and transportation peaks), Statistics Indonesia (BPS) announced that Indonesia’s monthly inflation in August was recorded at 0.12 percent month-to-month (m/m).

Read more ›

Indonesian inflation remained under control in July 2019 although it was slightly higher than our estimate. Still, authorities will need to carefully monitor prices of specific food commodities amid the long dry season as inflation of the raw foodstuffs expenditure group has remained relatively high.

Read more ›

Although Indonesia’s May consumer prices rose at their quickest pace in more than a year (which exceeded our expectations), Indonesian inflation remains at a comfortable level (for Indonesian standards).

Read more ›

Based on the latest data from Statistics Indonesia (BPS), which were released on 1 April 2019, Indonesian consumer prices continued to ease in March 2019 (in line with estimates). However, what is remarkable is that Indonesia’s annual inflation rate – 2.48 percent (y/y) in March 2019 – fell below the central bank’s target range (Bank Indonesia has set its inflation target for full-year 2019 at the range of 2.5–4.5 percent y/y). Indonesia’s latest inflation figure is the nation’s lowest inflation since December 2009. By Indonesian standards, inflation is currently remarkably low, hence it should manage to encourage household consumption.

Read more ›

Based on the latest data from Statistics Indonesia (BPS), consumer prices in Indonesia grew 2.57 percent year-on-year (y/y) in February 2019, a near-decade low, and below our forecast of 2.75 percent (y/y). The last time we saw this low level of inflation in Indonesia was back in November 2009.

Read more ›

Based on a survey that was conducted by the central bank of Indonesia (Bank Indonesia), the nation's consumer price index is forecast to rise modestly in February 2019.

Read more ›

For the 4th year in a row Indonesian inflation was under control. Based on data from Indonesia’s Central Statistics Agency (BPS), the nation’s annual headline inflation rate was 3.13 percent in full-year 2018. By Indonesian standards, that is a low inflation figure. The final figure even fell below the central government’s 3.5 percent (y/y) target that was set in the 2018 state budget and it fell below our (revised) prediction of 3.25 percent (y/y). But it did fall conveniently within the central bank’s wide target range of 2.5 – 4.5 percent (y/y).

Read more ›

Based on the latest data from Indonesia’s Central Statistics Agency (BPS), the nation’s annual headline inflation rate increased 3.23 percent year-on-year (y/y) in November 2018. The result is higher than we had anticipated and also implies that Indonesia’s consumer price index has now accelerated for a second straight month.

Read more ›

The latest data from the Central Bureau of Statistics (Badan Pusat Statistik, or BPS) show that Indonesia’s inflation rate accelerated more than we had expected. Indonesia’s consumer price index rose 0.28 percent month-on-month (m/m) in October 2018 and 3.16 percent year-on-year (y/y).

Read more ›

Based on the latest data of Indonesia's Statistics Agency (BPS), Indonesia experienced deflation of 0.18 percent month-on-month (m/m) in September 2018, a figure that exceeded our expectations. Consequently, Indonesia's annual inflation slowed to a two-year low of 2.88 percent (y/y), down from 3.20 percent (y/y) in August 2018. Year to date, Indonesian inflation eased to 1.94 percent in the January-September 2018 period.

Read more ›

In the second half of September 2022 the Indonesian rupiah experienced some steep depreciating pressures, nearly touching IDR 15,300 per US dollar. It prompted Bank Indonesia to step and intervene in markets to limit the currency’s decline; a step that typically leads to a drop in the country’s foreign exchange reserves.

Read more ›

Indonesia’s central bank (Bank Indonesia) – finally – decided to raise its benchmark interest rate by 25 basis points to 3.75 percent after concluding its two-day policy meeting on 23 August 2022, thereby joining the global wave of rate hikes as central banks need to combat accelerated inflation, while –especially in emerging markets – higher rates also function to prevent too much capital outflows as US assets become more attractive amid aggressive US Federal Reserve tightening.

Read more ›

What came as a surprise to us is that the Asian Development Bank (ADB) decided to raise its projection for Indonesia’s economic growth in full 2022 from 5.0 percent year-on-year (y/y) to 5.2 percent (y/y) in July 2022. This decision was substantiated in its Asian Development Outlook 2022 Supplement entitled Recovery Faces Diverse Challenges.

Read more ›

We were surprised to learn that Indonesia’s central bank (Bank Indonesia) decided to leave its interest rates unchanged at the two-day monetary policy meeting on 23-24 May 2022. The benchmark BI 7-Day Reverse Repo Rate was kept at 3.50 percent, while the deposit facility and lending facility rates were maintained at 2.75 percent and 4.25 percent, respectively. We had expected Bank Indonesia to raise its key rate by 0.25 percent to 3.75 percent at this occasion.

Read more ›

With the Ramadan month just having started, it is important to take a look at food prices in Indonesia. The Ramadan-Idul Fitri period is typically a period when prices rise amid a significant increase in demand.

Read more ›

It came as a big surprise to us when the central bank of Indonesia (Bank Indonesia) announced on 19 November 2020 (the day it concluded its two-day monetary policy meeting) that it decided to cut its benchmark interest rate (the seven-day reverse repo rate) by 25 basis points to 3.75 percent. Bank Indonesia also cut its deposit facility and lending facility rates by 25 basis points to 3.00 percent and 4.50 percent, respectively.

Read more ›

The central bank of Indonesia (Bank Indonesia) decided to cut its benchmark interest rate ("BI seven-day reverse repo rate") by 25 basis points (bps) to 4.75 percent at the two-day policy meeting on 19 and 20 February 2020.

Read more ›

On Monday 1 July 2019 Statistics Indonesia (BPS) released Indonesia’s latest inflation data. The data show that headline inflation in Southeast Asia’s largest economy eased to a level of 0.55 percent month-on-month (m/m) in June 2019, down from 0.68 percent (m/m) in May 2019 when price pressures peaked due to Ramadan and Lebaran celebrations. This period always gives rise to a significant boost in consumption, hence prices of foodstuffs peak. Meanwhile, people also tend to buy new clothes, bags and shoes because they want to look good at these celebrations.

Read more ›

There is concern that the Indonesian government's plan to curb price increases of (non-subsidized) fuels in Indonesia will impact negatively on private investors' enthusiasm to invest in Indonesia's oil and gas industry. Earlier this week Arcandra Tahar, Deputy Minister at the Energy and Mineral Resources Ministry, informed that the government wants to regulate prices of fuels in order to keep inflation in check.

Read more ›

The number of people who live in poverty in Indonesia fell by 1.19 million individuals, per September 2017, to 26.58 million, from 27.77 million poor people in March 2017 (Indonesia's Statistics Agency releases poverty data twice per year, covering the situation in the months March and September). This is a significant decline and therefore constitutes a very good development. In relative terms, Indonesia's poverty rate fell 0.52 percent from 10.64 percent to 10.12 percent (over the same period).

Read more ›