Meanwhile, Standard Chartered Bank economist Eric Sugandi expects July inflation at 0.75 percent (m/m), or, 7.1 percent (y/y). Sugandi added that Indonesia’s July inflation will not peak as high as in the previous two years as Indonesians’ purchasing power has been curbed amid the economic slowdown, high interest rate environment, weak commodity prices and prolonged high inflation level. He also emphasizes that government intervention has managed to curb inflationary pressure on certain products.

Sugandi detected weak domestic demand during this year’s Idul Fitri period and says the government should pay attention to this and make efforts to boost domestic consumption. One key strategy to boost such consumption is through improved government spending. So far this year there has been a delay in government spending hence limiting job availability and general economic growth of Southeast Asia's largest economy.

Further Reading:

Inflation Indonesia Update June: Consumer Price Index Up 0.54% m/m

 Inflation in Indonesia:

Month  Monthly Growth
          2013
 Monthly Growth
          2014
 Monthly Growth
          2015
January          1.03%          1.07%         -0.24%
February          0.75%          0.26%         -0.36%
March          0.63%          0.08%          0.17%
April         -0.10%         -0.02%          0.36%
May         -0.03%          0.16%          0.50%
June          1.03%          0.43%          0.54%
July          3.29%          0.93%
August          1.12%          0.47%
September         -0.35%          0.27%
October          0.09%          0.47%
November          0.12%          1.50%
December          0.55%          2.46%
Total          8.38%          8.36%          0.96%

Source: Statistics Indonesia (BPS)

Inflation in Indonesia 2008-2014:

     2008    2009    2010    2011    2012    2013    2014
Inflation
(annual percent change)
    9.8     4.8     5.1     5.4     4.3     8.4     8.4

Source: World Bank

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