Rising inflation in November in Southeast Asia's largest economy was particularly attributed to higher prices of shallots, chilies, and tomatoes. Not only in November but also throughout the year 2016, food prices have been the biggest contributor to inflation in Indonesia.

Meanwhile, Indonesia's core inflation, which excludes administered and volatile food prices, was stable last month at 3.07 percent (y/y), down narrowly from 3.08 percent (y/y) in the preceding month.

In the first 11 months, Indonesian inflation has now reached 2.59 percent and with one more month to go it is almost certain that the full-year result will fall within the central bank's target of 3 - 5 percent (y/y). Although in December-January Indonesia always experiences a peak in inflation (due to rising consumer spending amid Christmas and New Year celebrations) it will require a huge shock to push inflation realization outside the central bank's target.

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%          0.47%
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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