Last month we started our inflation update stating that “the global threat of inflation has not reached Indonesia yet”. One month later, it now seems that a high inflation cycle has arrived in Indonesia; one that may continue in the next couple of months.
Based on the latest data released by Indonesia’s Statistical Agency (in Indonesian: Badan Pusat Statistik, BPS), Indonesian inflation accelerated by 0.66 percent month-on-month (m/m) in March 2022. This is the highest month of inflation for Indonesia since May 2019. While back in 2019 Ramadan covered almost the full month of May (hence food prices came under pressure in May 2019), in 2022 the Ramadan started in April. And so, we see significant price pressures ahead of Ramadan already.
If we take a look at the international situation, then there are various matters that are causing inflation:
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