Today, Statistics Indonesia (BPS), a non-departmental government institute, stated that the inflation rate of January increased due to the government's decision to raise electricity tariffs and due to massive floods in Jakarta and other cities. January's headline inflation is 1.03 percent. The year-on-year inflation rate now stands at 4.57 percent; still within Indonesia's Central Bank's target of 4.5 ±1 percent.
Food products contributed most to the increase in inflation rate. The underlying reason being transportation disruptions because of bad weather. These disturbances are temporary and will moderate as the weather improves. Year-on-year core inflation - which excludes items that face volatile price movements - is currently 4.32 percent.
Inflation might rise in the months ahead due to a weakening rupiah (which makes imported products more expensive), higher minimum wages and more increases in electricity tariffs (and a possible rise in fuel price).