In fact, Indonesia’s full-year 2019 inflation could even stay below 3 percent year-on-year (y/y) provided prices remain under control in the last month of the year. The Christmas and New Year celebrations traditionally cause some additional inflationary pressures in December as consumption rises. However, based on the track-record of the government December inflation has been maintained well below 1 percent (m/m) in recent years. As such, it is safe to assume that full-year inflation will be around 2.90 - 3.00 percent (y/y).

Inflation in Indonesia:

Month M/M Growth
      2018
M/M Growth
      2019
January      0.62%      0.32%
February      0.17%     -0.08%
March      0.20%      0.11%
April      0.10%      0.44%
May      0.21%      0.68%
June      0.59%      0.55%
July      0.28%      0.31%
August     -0.05%      0.12%
September     -0.18%     -0.27%
October      0.28%      0.02%
November      0.27%      0.14%
December      0.62%
Total     3.13%     2.37%


Headline Consumer Price Index of 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%      0.69%
July      3.29%      0.93%      0.93%      0.69%      0.22%
August      1.12%      0.47%      0.39%     -0.02%     -0.07%
September     -0.35%      0.27%     -0.05%      0.22%      0.13%
October      0.09%      0.47%     -0.08%      0.14%      0.01%
November      0.12%      1.50%      0.21%      0.47%      0.20%
December      0.55%      2.46%      0.96%      0.42%      0.71%
Total      8.38%      8.36%      3.35%      3.02%      3.61%

Source: Statistics Indonesia (BPS)

Inflation in Indonesia and Central Bank (BI) Target:

  2014 2015 2016 2017 2018 2019
Inflation
(annual % change)
 8.4  3.4  3.0  3.6  3.1
BI Target
(annual % change)
 4.5  4.0  4.0  4.0  3.5  3.5

 

  2008 2009 2010 2011 2012 2013
Inflation
(annual % change)
 9.8  4.8  5.1  5.4  4.3  8.4
BI Target
(annual % change)
 5.0  4.5  5.0  5.0  4.5  4.5

Source: Bank Indonesia


Read the article in the November 2019 edition of our monthly report. You can purchase this report by sending an email to info@indonesia-investments.com or a WhatsApp message to the following number: +62(0)8788.410.6944

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