Indonesia's Inflation Rises, Mainly on Food

Indonesia's inflation rate increased in December, mainly on higher demand for basic food commodities during the festive month, which may indicate rising confidence among households.

The Consumer Price Index, which is used to gauge the inflation rate, rose 3.61% year over year in December, faster than November's 3.30%. From a month earlier, consumer prices of goods and services rose 0.71% after rising by 0.20% in November, as prices of basic food commodities increased 2.26% in December.

The median forecast of 10 economists polled by The Wall Street Journal is for 3.32% year-over-year inflation and a 0.43% increase month over month.

Year-over-year core inflation, which doesn't include volatile food prices and costs determined by the government, slowed to 2.95% from 3.05% in November.

The year-end inflation in 2017 was on the lower side of Bank Indonesia's 3%-5% target. For 2018, a base effect in 2017 and the government's promise not to raise energy prices this year is likely to result in a lower inflation reading within the central bank's target of 2.5% to 4.5%.

Write to I Made Sentana at

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January 01, 2018 23:41 ET (04:41 GMT)