Indonesia’s Annual Inflation Rate Slows in May
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Indonesia’s annual inflation rate slowed in May as the increase in food prices remained modest despite rising demand during the Muslim fasting month of Ramadan, data from the Central Statistics Agency showed on Monday (04/06).
The headline consumer price index (CPI) in May rose 3.23 percent from a year ago, slightly below the median forecast in a Reuters poll, which had expected a rate of 3.28 percent. April’s annual rate was 3.41 percent.
On a monthly basis, consumer price rose 0.21 percent.
The annual and monthly rates were unusually low for inflation during Ramadan, which was a “delightful news” for authorities seeking to keep inflation under control, said Suhariyanto, the head of the statistics agency.
However, the annual core inflation rate, which excludes government-controlled and volatile food prices and was more affected by the rupiah currency’s weakness, rose to 2.75 percent in May, from April’s 2.69 percent. The poll had expected a rate of 2.73 percent.
Bank Indonesia targets inflation at 2.5-4.5 percent this year.
Questions & Answers
Q.What was Indonesia's annual inflation rate in May and how did it compare to expectations?
What was Indonesia's annual inflation rate in May and how did it compare to expectations?
Indonesia’s annual headline consumer price index rose 3.23 percent in May. This was slightly below the median forecast of 3.28 percent from a Reuters poll of economists.
Q.What was unusual about the inflation figures during Ramadan this year?
What was unusual about the inflation figures during Ramadan this year?
Both the annual and monthly inflation rates were unusually low for the Ramadan period. This was considered good news for authorities aiming to control inflation.
Q.How did the core inflation rate perform in May, and what influenced it?
How did the core inflation rate perform in May, and what influenced it?
The annual core inflation rate increased to 2.75 percent in May from 2.69 percent in April. This rate, which excludes government-controlled and volatile food prices, was more affected by the rupiah currency’s weakness.
Q.What is Bank Indonesia's target range for inflation this year?
What is Bank Indonesia's target range for inflation this year?
Bank Indonesia aims to keep inflation between 2.5 and 4.5 percent for the current year. The May headline rate of 3.23 percent falls within this target.
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