Indonesia’s Central Bank (BI) Expects Low Inflation in December 2013
The central bank of Indonesia (Bank Indonesia) expects that the country’s inflation figure in December 2013 (month-to-month) will be below 0.5 percent. Up to the third week of December, inflation increased 0.36 percent according to data from Bank Indonesia. Considering the month of December always brings along inflationary pressures due to seasonal celebrations (Christmas and New Year), Bank Indonesia's inflation estimate of below 0.5 percent can be considered rather low.
Governor of Bank Indonesia, Agus Martowardojo, stated that total inflation in 2013 is likely to reach 8.5 percent (yoy), far below Bank Indonesia’s revised inflation target (between 9 and 9.8 percent) that was et after prices of subsidized fuels were increased by the Indonesian government in June 2013. These prices were raised by an average of 33 percent, and, in combination with seasonal festivities (Ramadhan and Idul Fitri) as well as mismanagement regarding import quotas of certain food products, it led to significantly accelerated inflation. Bank Indonesia’s initial inflation target for 2013 (before the fuel prices were raised) was between 3.5 and 5.5 percent. In November 2013, the country’s inflation stood at 8.37 percent (yoy).
Inflation in Indonesia:
(annual percent change)
¹ Year to date (January-November 2013)
Source: Statistics Indonesia