BPS Chairman Suhariyanto said, generally, food prices declined in October (for example onions and chicken meat, although the price of red chilies actually rose). However, inflation in Indonesia was triggered by higher prices of mobile phone credit, the rising costs of rent (housing), rising college and university tuition fees, higher prices of filter cigarettes as well as higher electricity rates.

Indonesia's calendar year inflation accelerated to 2.11 percent in October 2016. Barring any unforeseen shocks, inflation will fall well within the central bank (Bank Indonesia)'s inflation target of 3 - 5 percent (y/y) at the year-end. We expect inflation to reach 3.1 percent (y/y) in full-year 2016 because monthly inflation in November is usually low (provided the government does not adjust administered prices), while December inflation can accelerate to the range of 0.50 - 1.00 percent (m/m) due to rising consumption ahead of Christmas and New Year celebrations.

Inflation in Indonesia:

Month  Monthly Growth
          2013
 Monthly Growth
          2014
 Monthly Growth
          2015
 Monthly Growth
          2016
January          1.03%          1.07%         -0.24%          0.51%
February          0.75%          0.26%         -0.36%         -0.09%
March          0.63%          0.08%          0.17%          0.19%
April         -0.10%         -0.02%          0.36%         -0.45%
May         -0.03%          0.16%          0.50%          0.24%
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%
December          0.55%          2.46%          0.96%
Total          8.38%          8.36%          3.35%

Source: Statistics Indonesia (BPS)

Inflation in Indonesia and Central Bank 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  
Bank Indonesia 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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