This 2018 file photo showed a merchant arrange chicken carcasses for sale at a market in Palu, Central Sulawesi, on Dec 12, 2018. (Antara Photo/Basri Marzuki)

Inflation Picks Up to Fastest Pace in Three Months Ahead of Idul Fitri


MAY 03, 2021

Jakarta. Indonesia has seen inflation accelerated to its fastest pace in three months in April, as demand for foods and clothes during the Islamic fasting month of Ramadan picked up and drove up the commodities' prices. 

The consumer price index — a composite measure gauging price level from a broad basket of goods — rose 1.42 percent in April from the same month last year, the Central Statistics Agency (BPS) said in a statement on Monday. That was the highest inflation level since January when the Southeast Asia economy reported 1.55 percent year-on-year inflation. 


Items in the food, beverage, and tobacco category rose by 2.33 percent compared to the same month last year, accounting for 38 percent of April's inflation. "Several commodities saw an increase in prices in April, including purebred chicken, cooking oils ..., and clove cigarettes," the agency said in the statement. 

Restaurants and personal grooming services increased by 2.35 and 2.6 percent, respectively, each contributed 15 percent to the month's inflation, BPS data showed. 

The healthcare costs remain on the upward trajectory, up by 2.23 percent in April, as most healthcare facilities struggle with the fallout of the Covid-19 pandemic. 

On the other hand, prices of information, telecommunication, and financial services were largely stagnated, ticking up by only 0.03 percent in April. 

Core inflation, which excludes the volatile food prices and government-administered prices, slowed down to 1.18 percent in April, compared to 1.21 percent in March, reflecting demands on items beyond food items remained subdued. 


April's inflation came short of Bank Indonesia's projection. The country's central bank estimated that the inflation would have been at 1.47 percent. Still, the price level was within the central bank's target this year between 2 percent and 4 percent. 

Bank Indonesia has been keeping its benchmark interest rate at a record low of 3.5 percent for two straight months now. Tame inflation should have allowed Bank Indonesia to cut the interest rate further, but economists have noted that Bank Indonesia may refrain from doing so, taking into account rupiah stability