Indonesia May annual inflation accelerates on spending for Ramadan

12, Jun. 2019

JAKARTA, NNA – Indonesia’s annual rate of inflation in May accelerated at the fastest pace in more than a year, led by the usual rise in spending on food, clothing and traveling during the month of Ramadan.

Statistics Indonesia released the monthly Consumer Price Index data for May on Monday.

Key points:

―― The overall May CPI rose 3.32 percent from a year earlier, coming in higher than expected and accelerating from a 2.83-percent rise in April. It was the highest increase since 3.41 percent recorded in April 2018.

―― From the previous month, the CPI edged up 0.68 percent, compared to a 0.44 percent increase in April.

―― Excluding volatile food and energy items, the core inflation measure gained 3.12 percent on year vs. a 3.05-percent rise the previous month. It was the fastest rate of increase since a 3.13-percent rise in June 2017.

Takeaway:

―― Bank Indonesia will review its monetary policy stance at the next meeting on June 19-20. The central bank has predicted inflation this year will be below the midpoint of its target range of 2.5 percent to 4.5 percent.

―― At its last meeting on May 15-16, the bank left its key interest rate unchanged for the sixth consecutive time, after raising it to 6 percent last November, as expected, to support growth amid the global slowdown triggered by the U.S.-China trade row.