Consumer Price Index Indonesia: November Inflation at 3.30% Y/Y
Indonesian inflation eased further in November 2017. Based on the latest official announcement of Statistics Indonesia (BPS), released on Monday morning (04/12), inflation was recorded at 0.20 percent month-on-month (m/m) in November, a relatively low figure for November inflation if we compare it to November inflation figures in recent years (see table below).
On a year-on-year (y/y) basis, Indonesian inflation eased to 3.30 percent in November, down from 3.58 percent (y/y) in the preceding month and falling below analysts' estimates that averaged 3.40 percent (y/y). Meanwhile, core inflation (which excludes volatile food prices and administered prices) was recorded at 3.05 percent (y/y), slowing modestly from 3.07 percent (y/y) in October.
Year-to-date, Indonesian inflation has now reached 2.87 percent. Undoubtedly, with only one month left, Indonesia's full-year 2017 inflation rate will remain well within the central bank (Bank Indonesia)'s target range of 3 - 4 percent (y/y). Last month, Bank Indonesia said it expects inflation to be at around 3.0 - 3.5 percent (y/y) at the year-end.
Low inflation (low for Indonesian standards) could be a reason for Bank Indonesia to not raise its benchmark interest rate at the December policy meeting. Considering the Federal Reserve may hike its Fed Funds Rate, Bank Indonesia is expected to follow suit in order to avert too much capital outflow as well as pressure on the rupiah.
BPS Head Suhariyanto said November inflation was primarily caused by higher prices of chili, red onions and rice. He added that noodles and tobacco products also played a big role in November inflation. Meanwhile, prices of garlic and tomatoes fell.
Inflation in Indonesia:
Source: Statistics Indonesia (BPS)
Inflation in Indonesia and Central Bank (BI) Target 2008-2016:
(annual % change)
(annual % change)
Source: Bank Indonesia
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