Minister of National Development Planning (Bappenas) Armida Alisjahbana is optimistic that Indonesia's inflation rate will stay below the six percent mark in 2014. After seeing inflation ease to 7.75 percent (year-on-year) in February (from 8.22 percent in January), Alisjahbana in fact believes that inflation can be kept below 5.5 percent (just within the target range of Bank Indonesia). Limited inflation is important in the context of poverty eradication. The country's poverty rate is targeted to ease to 10.5 by the year-end.

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On Monday (03/03, Statistics Indonesia announced that inflation in Indonesia stood at 0.26 percent in February 2014. The largest inflationary pressures in this month were caused by higher prices of instant food products, drinks, cigarettes and tobacco. The country's February inflation rate was much lower than the 1.07 percent inflation recorded in the previous month (which was brought on by severe floods that disrupted distribution networks). Year-on-year (yoy) inflation eased to 7.75 percent from 8.22 percent in January 2014.

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Indonesia Investments updated the analysis of Indonesia's inflation rate in our Macroeconomic Indicators section. Indonesian inflation, which is traditionally more volatile and higher (due to robust economic growth) than in advanced countries or other emerging markets, accelerated recently after administered price adjustments in mid-2013 (particularly higher fuel prices). As a result, Bank Indonesia required to raise its benchmark interest rate (BI rate) gradually from 5.75 percent in June 2013 to 7.50 percent in November 2013.

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Today (03/02), Statistics Indonesia released Indonesia's official inflation rate for January 2014. The monthly inflation rate accelerated to 1.07 percent, which is higher than most analysts had forecast. The main contributor to January's inflation were higher food products prices. Amid high rainfall and severe floods in several parts of Indonesia, disrupted logistics distribution impacted on these prices. The depreciating rupiah exchange rate is also a factor that makes retailers adjust their prices. Annual inflation rate eased from 8.38 percent to 8.22 percent.

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On Thursday (02/01), Statistics Indonesia (BPS) released the December 2013 inflation figure of Indonesia as well as the calender inflation rate for full-year 2013. Higher food prices and house prices were the main contributors to the 0.55 percent inflation rate in December 2013. Seasonal celebrations, like Christmas and New Year, always translate into higher inflationary pressures in Southeast Asia's largest economy. Higher fuel prices were the main contributor to the 8.38 percent inflation rate in full-year 2013.

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The central bank of Indonesia (Bank Indonesia) expects that the country’s inflation figure in December 2013 (month-to-month) will be below 0.5 percent. Up to the third week of December, inflation increased 0.36 percent according to data from Bank Indonesia. Considering the month of December always brings along inflationary pressures due to seasonal celebrations (Christmas and New Year), Bank Indonesia's inflation estimate of below 0.5 percent can be considered rather low.

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The DBS Bank expects that Indonesia's inflation rate will reach 8.2 percent (year-on-year) by the end of 2013, supported by a low monthly inflation rate in the last month of the year. The DBS Bank believes that the pace of inflation in December 2013 will be slightly higher than the country's November inflation (0.12 percent). In the period January to November 2013, inflation in Southeast Asia's largest economy has accumulated to 7.79 percent (yoy). The bank also stated that it expects inflation to reach 6.7 percent in full-year 2014.

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Agus Martowardojo, Governor of Bank Indonesia, expects Indonesia's November inflation rate to be modest at 0.05 to 0.1 percent (month-to-month). If Martowardojo's expection will be met then it means that inflation in Southeast Asia's largest economy is under control as November would be the third consecutive month of low inflation (or deflation). Inflation had accelerated significantly since June 2013 after the government raised prices of subsidized fuels and might reach 9 percent (yoy) by the end of 2013.

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The central bank of Indonesia (Bank Indonesia) sees a continued easing trend in inflationary pressures in October 2013. Indonesia's inflation in October 2013 was recorded at 0.09 percent (month-to-month), thus confirming the indication that monthly inflation is back to its normal pattern in the last five years. However, the annual inflation pace is still high at 8.32 percent (yoy). Limited inflation in October was influenced by deflation of the food group component (0.80 percent mtm), although commodity prices rose (especially red chili).

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Inflation in October 2013 was recorded at 0.09%. This low inflation rate was mainly supported by easing food and clothes prices. The foodstuffs component in the basket recorded deflation of 0.34 percent, while clothes posted deflation of 0.56 percent. These details were presented by Suryamin, Head of Statistics Indonesia (BPS) on Friday (01/11). The 0.09 percent October inflation rate is low compared to past results in the same month with the notable exception of October 2011 when 0.12 percent of deflation was recorded.

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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.

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Rising commodity prices are good for the Indonesian economy because the country is one of the world's biggest commodity exporters. However, rising commodity prices will also make it more difficult for the government to keep inflation within its target range of 2.5 - 4.5 percent year-on-year (y/y) in 2018.

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In line with expectations, Indonesia's inflation rate eased to 2.79 percent year-on-year (y/y) in August 2016, from 3.21 percent (y/y) in the preceding month. Consumer price inflation in Indonesia fell on the back of declining prices after the Islamic celebrations of Ramadan and Idul Fitri ended in July. On a monthly basis, Indonesia recorded deflation of 0.02 percent (m/m) in August. Meanwhile, the manufacturing sector of Indonesia turned positive again.

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The first day of the month - in case of a working day - implies that investors can count on the release of several macroeconomic data from Indonesia, specifically inflation and manufacturing activity. Statistics Indonesia (BPS) announced this morning (01/06) that Indonesia's consumer inflation reached 0.24 percent (m/m), or 3.33 percent (y/y), in May 2016. Meanwhile, the Nikkei Indonesia Manufacturing Purchasing Managers' Index (PMI) eased to a reading of 50.6 in May from 50.9 one month earlier. Lets take a closer look at these data.

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The central bank of Indonesia (Bank Indonesia) expects to see deflation at 0.15 percent month-to-month (m/m) in February 2016. Bank Indonesia Governor Agus Martowardojo said lower (government) administered prices in combination with low core inflation will be the recipe for deflation in the second month of the year. The lower administered prices that are primarily the cause of deflation consist of fuel prices, air fares and 12-kilogram liquefied petroleum gas (LPG) canisters. In the first month of the year Indonesian inflation accelerated to 4.14 percent (y/y).

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After having experienced two consecutive months of deflation in September and October, Indonesia is expected to see inflation again in November, primarily on higher food prices (chicken meat and rice). Agus Martowardojo, Governor of Bank Indonesia, expects an inflation rate of 0.2 percent (month-on-month) in November. This would mean that inflation in full-year 2015 is likely to reach 3 percent (y/y), in line with earlier estimates and within - or perhaps slightly below - Bank Indonesia's target range of 3 - 5 percent (y/y) of inflation in 2015.

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Statistics Indonesia (BPS) announced today (01/09) that Indonesian inflation has eased slightly to 7.18 percent (y/y) in August 2015, from 7.26 percent (y/y) in the preceding month. On a month-on-month basis, inflation climbed 0.39 percent in August, below analysts’ expectations. Meanwhile, Indonesia’s manufacturing sector continued to contract in August, albeit conditions improved from the preceding month.

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The central bank of Indonesia (Bank Indonesia) predicts mounting inflationary pressures in the months June and July due to the Ramadan and Idul Fitri festivities, the possible impact of the El Nino weather phenomenon, and the new school year. Bank Indonesia expects to see inflation at 0.66 percent month-to-month (m/m) in June 2015, particularly driven by volatile food prices (a normal phenomenon ahead of Idul Fitri). On a year-on-year (y/y) basis, Indonesian inflation is expected to accelerate to 7.40 percent, from 7.15 percent in May.

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Statistics Indonesia (BPS) announced on Monday morning (04/05) that Indonesia’s inflation accelerated to 6.79 percent year-on-year (y/y) in April 2015. On a month-to-month basis, Indonesian inflation was recorded at 0.36 percent in April. Although this result is in line with analysts’ previous projections, April inflation realization is in sharp contrast with the ‘usual’ inflation pace in the fourth month of the year. Usually, Indonesia records slight deflation in April as prices ease amid the peak of the harvest season.

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According to the latest data from Statistics Indonesia (BPS), Indonesia recorded monthly inflation of 0.17 percent in March 2015. It was the first month this year in which Indonesia recorded inflation. In January and February Indonesia experienced deflation of 0.24 percent (m/m) and 0.36 (m/m), respectively. March inflation was primarily the result of administered price adjustments: higher prices of (low-octane) gasoline, diesel and 12-kg LPG canisters. These adjustments were necessary amid rising oil prices and rupiah depreciation.

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