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.
Meanwhile, ahead of – and during - Lebaran celebrations (the celebrations that mark the end of the fasting month) Indonesians tend to travel (either back to their places of origin to spend some days with their extended families - a tradition that is locally known as ‘mudik’ - or simply to go on holiday). Amid great demand for transportation (for the journey), prices of transportation services such as airplanes, buses, and ships are raised.
Although the pace of 0.55 percent (m/m) in June 2019 is slightly higher than we had expected, it is still the lowest monthly June inflation figure for Indonesia in several years. This is because the Ramadan and Lebaran period is slowly shifting. The exact dates of the ninth month of the Muslim calendar, Ramadan (Islam’s holy fasting month), vary from year to year, because the Muslim calendar (Hijrah) is based on a lunar cycle of 29 or 30 days. In other words, this period is gradually moving towards the start of the year, implying the peak of inflation is also shifting.
Read the full article in the June 2019 edition of our monthly research report. You can purchase the report by sending an email to firstname.lastname@example.org or a WhatsApp message to the following number: +62(0)8788.410.6944
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