Consumer Price Index Indonesia: 14-month High in May 2017
Inflation continued to rise in Indonesia in May 2017 but at a slower pace than expected. According to the latest data from Indonesia's Statistics Agency (BPS), the annual inflation rate rose to 4.33 percent (y/y) in May, up from 4.17 percent (y/y) in the preceding month. The May inflation figure is the highest in 14 months. On a monthly basis Indonesian inflation was recorded at 0.39 percent (m/m) in May 2017.
Last week Bank Indonesia had already stated that it detected rising inflationary pressures in Indonesia - specifically rising food prices and transportation tariffs ahead of the start of the holy Ramadan month (the Islamic fasting month). The Ramadan (and subsequent Idul Fitri celebrations) always trigger a peak in Indonesian inflation as consumer demand surges.
BPS said Indonesia's basic food commodity prices, including rice, spices, meats, and cooking oil, rose 0.86 percent (m/m) in May, contributing the most to May inflation.
Meanwhile, core inflation, which excludes administered price adjustments and volatile food prices, slowed to 3.20 percent (y/y) in May 2017 (from 3.28 percent in April).
Bank Indonesia still targets Indonesia's annual inflation at the range of 3-5 percent in full-year 2017. However, it may come close to the top of that range. Bank Indonesia's next monthly policy meeting is scheduled for June 14-15, 2017.
Inflation in Indonesia:
| Month | M/M Growth 2013 |
M/M Growth 2014 |
M/M Growth 2015 |
M/M Growth 2016 |
M/M Growth 2017 |
| January | 1.03% | 1.07% | -0.24% | 0.51% | 0.97% |
| February | 0.75% | 0.26% | -0.36% | -0.09% | 0.23% |
| March | 0.63% | 0.08% | 0.17% | 0.19% | -0.02% |
| April | -0.10% | -0.02% | 0.36% | -0.45% | 0.09% |
| May | -0.03% | 0.16% | 0.50% | 0.24% | 0.39% |
| 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% | 0.42% | |
| Total | 8.38% | 8.36% | 3.35% | 3.02% |
Source: Statistics Indonesia (BPS)
Inflation in Indonesia and Central Bank (BI) 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 | 3.0 |
| BI Target (annual % change) |
5.0 | 4.5 | 5.0 | 5.0 | 4.5 | 4.5 | 4.5 | 4.0 | 4.0 |
Source: Bank Indonesia