Inflation Eases in January, Aided by Subdued Rise in Transport, Communication Costs

Indonesia's annual inflation rate eased in January as a rise in raw food prices was offset by more subdued increases in transportation and communication costs, the Central Statistics Agency (BPS) said on Tuesday (30/01).(Reuters Photo/Fatima El-Kareem)

By : Adinda Normala | on 3:15 PM February 01, 2018
Category : Business, Economy, Featured

Jakarta. Indonesia's annual inflation rate eased in January as a rise in raw food prices – the biggest inflation contributor – was offset by more subdued increases in transportation and communication costs, the Central Statistics Agency, or BPS, announced on Tuesday (01/02).

The agency said the headline consumer price index increased 3.25 percent in January compared with the same period a year ago. This was the slowest since December 2016. The CPI showed a 3.61 percent year-on-year increase in December.

The CPI rose 0.62 percent in January on a monthly basis, compared with 0.71 percent in December. Core inflation, which strips out administered and volatile food prices, increased to 2.69 percent from 2.95 in the previous month. This is the second month core inflation was below 3 percent.

Raw food prices made the biggest contribution to January inflation, with rice being the biggest single contributor, followed by chicken meat, fresh fish and chili peppers, BPS head Suhariyanto said in a press conference in Jakarta on Tuesday.

However, he added that the upcoming harvest season in March and April is expected to tame the rice price.

Consumer spending on transportation and communication has meanwhile declined, influenced by lower airfares.

The government has set an inflation target of 3.5 percent for this year, as outlined in the 2018 state budget, while Bank Indonesia's target is between 2.5 percent and 4.5 percent.

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