Last week Bank Indonesia had already stated that it detected rising inflationary pressures in Indonesia - specifically rising food prices and transportation tariffs ahead of the start of the holy Ramadan month (the Islamic fasting month). The Ramadan (and subsequent Idul Fitri celebrations) always trigger a peak in Indonesian inflation as consumer demand surges.

BPS said Indonesia's basic food commodity prices, including rice, spices, meats, and cooking oil, rose 0.86 percent (m/m) in May, contributing the most to May inflation.

Meanwhile, core inflation, which excludes administered price adjustments and volatile food prices, slowed to 3.20 percent (y/y) in May 2017 (from 3.28 percent in April).

Bank Indonesia still targets Indonesia's annual inflation at the range of 3-5 percent in full-year 2017. However, it may come close to the top  of that range. Bank Indonesia's next monthly policy meeting is scheduled for June 14-15, 2017.

Inflation in Indonesia:

Month M/M Growth
      2013
M/M Growth
      2014
M/M Growth
      2015
M/M Growth
      2016
M/M Growth
      2017
January      1.03%      1.07%     -0.24%      0.51%      0.97%
February      0.75%      0.26%     -0.36%     -0.09%      0.23%
March      0.63%      0.08%      0.17%      0.19%     -0.02%
April     -0.10%     -0.02%      0.36%     -0.45%      0.09%
May     -0.03%      0.16%      0.50%      0.24%      0.39%
June      1.03%      0.43%      0.54%      0.66%
July      3.29%      0.93%      0.93%      0.69%
August      1.12%      0.47%      0.39%     -0.02%
September     -0.35%      0.27%     -0.05%      0.22%
October      0.09%      0.47%     -0.08%      0.14%
November      0.12%      1.50%      0.21%      0.47%
December      0.55%      2.46%      0.96%      0.42%
Total      8.38%      8.36%      3.35%      3.02%

Source: Statistics Indonesia (BPS)

Inflation in Indonesia and Central Bank (BI) Target 2008-2016:

  2008 2009 2010 2011 2012 2013 2014 2015 2016
Inflation
(annual % change)
 9.8  4.8  5.1  5.4  4.3  8.4  8.4  3.4  3.0
BI Target
(annual % change)
 5.0  4.5  5.0  5.0  4.5  4.5  4.5  4.0  4.0

Source: Bank Indonesia

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