Statistics Indonesia (BPS) is optimistic that Indonesia's inflation rate in February 2014 can be curbed below the one percent mark. BPS official Sasmito Hadi Wibowo said that inflationary pressures are easing as floods have gone, while the LPG price moderated from last month. Prices of chicken meat and rice have remained stable but the price of chili is still growing slightly. In January 2014, severe floods caused 1.07 percent (month-to-month) of inflation due to disrupted distribution networks.
However, Governor of Indonesia's central bank, Agus Martowardojo, recently said that due to the domestic weather conditions and other natural disasters (volcano eruption on Sumatra and high waves at sea), inflation in February 2014 may accelerate compared to January's 1.07 percent result. In his opinion, inflation will ease more markedly in the second quarter of this year. Traditionally, Indonesia has relatively low inflation figures in the period March to June.
Wibowo further stated that inflationary pressures in Indonesia usually tend to peak in two periods, i.e. December-January and July-August. In the December-January period, inflationary pressures are brought about by Christmas and New Year celebrations as well as (a peak of) the rainy season in January (which can result in floods). In the July-August period, inflationary pressures emerge as a result of the holiday period, the holy Muslim fasting month, Idul Fitri celebrations and the arrival of the new school year.
Inflation in Indonesia:
|Month|| Monthly Growth
(annual percent change)
Source: Statistics Indonesia