14 June 2022 (closed)
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While Indonesian inflation accelerated more than we had predicted amid the festive season in May 2021 (referring to the Idul Fitri celebrations that mark the end of the Ramadan month), it remained low overall for Southeast Asia’s largest economy.
Looking at the latest data released by Badan Pusat Statistik (BPS) there did occur the normal peak in inflation around Idul Fitri in Indonesia due to an increase in food and transportation prices. Overall, however, the peak was much lower than under normal circumstances as the COVID-19 crisis continues to undermine consumption and people’s movement (for example the government restricted the mudik, which refers to the traditional exodus of millions of city dwellers to the rural and suburban regions to celebrate Idul Fitri with their families).
Overall, Indonesian inflation was recorded at 0.32 percent month-on-month (m/m) in May 2021, up from a pace of 0.13 percent (m/m) in the preceding month. And because inflation was higher than during last year’s Ramadan and Idul Fitri period (when the economy of Indonesia hit rock bottom in the COVID-19 crisis), we did see Indonesia’s annual inflation rate grow to 1.68 percent year-on-year (y/y), from 1.42 percent (y/y) in April 2021.
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