A hawker sells children's toys during Idul Fitri prayer in Kebumen, Central Java, on June 5. (JG Photo/Yudha Baskoro)

Inflation Rises at Its Fastest as Indonesians Celebrate Ramadan and Idul Fitri


JUNE 10, 2019

Jakarta. Inflation picked up in May, accelerating to its highest pace in more than 12 months driven by bigger demand for raw foods and transportation as Indonesians observed the Islamic fasting month of Ramadan and prepared for Idul Fitri festivities. 

The consumer price index increased by 3.3 percent in May from the same month last year, a rate that the country last saw in April last year.

The inflation rate in April this year was only at 2.8 percent. The low level of inflation allowed Bank Indonesia, the central bank, some room to keep its benchmark interest rate at 6 percent despite rising pressure on the rupiah.  

"The inflation rate was still below the [central bank's] 3.5 percent target. This means overall inflation in May was still under control," the head of the Central Statistics Agency Suhariyanto said on Monday. 

"The dominant commodities [whose rising prices] drove inflation included red chili and chicken meat. This is actually quite reasonable [during] the fasting month and preparation for Idul Fitri," he said. 

Inflation typically peaks around Ramadan and Idul Fitri as Indonesians, 86 percent of whom are Muslims, spend more on special meals, driving up demand for raw foods. 

In May, core inflation, which excludes volatile raw food prices and administered prices like fuel and electricity, increased to 3.1 percent.

Raw food prices rose by 4.1 percent from last year, while prices of processed foods rose by 3.8 percent.

Transportation and communication costs rose by 3.6 percent as Indonesians grappled with skyrocketing airfares, among others. 

Suhariyanto said he expected inflation rate would come down in June, as pressure from the Ramadan and Idul Fitri festivities subside.