Retail gasoline trader fills a scooter's fuel tank with subsidized gasoline Pertalite in Depok, West Java on Oct 1, 2022. (B1 Photo/Mohammad Defrizal)

Indonesia Inflation Jumps to The Highest Level in Seven Years

BY :JAKARTA GLOBE

OCTOBER 03, 2022

Jakarta. Indonesia's inflation accelerated in September as subsidized fuel prices hike early in the month increased energy and transport costs for the country's consumers, the statistics agency said on Monday.

The Central Statistics Agency (BPS) said the consumer price index—a broad basket of good and service prices used to measure inflation—rose 5.95 percent in September compared to the same month last year. That was the highest inflation rate since October 2015. In August, the inflation rate was 4.69 percent.

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Core inflation, which excludes volatile foods and administered prices like fuel and energy, accelerated to 3.21 percent, compared to 3.04 percent a month earlier.

"In September, gasoline, public transport fares, rice, diesel, inter-city fares, online rideshare fares, and household fuel price contribute to the inflation the most," the Head of BPS Margo Yuwono said. 

The government increased the subsidized fuel price by up to 38 percent on Sep 3 in an attempt to rein in the deficit in the 2022 state budget.

Bank Indonesia Governor Perry Warjiyo said earlier that the central bank expected inflation pressure to persist until the end of this year. 

The central bank projected inflation would reach 5 percent by the end of 2022. Year to date, inflation has gained 4.84 percent, BPS announced. 

Next year, Perry said inflation could exceed 4 percent amid heightened global uncertainties. 

To fight inflation, Bank Indonesia has increased its benchmark interest rate by 75 basis points to 4.25 percent in the past two months. 

 

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