Indonesia’s November Inflation Rate Surprisingly Picks Up
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Indonesia’s annual inflation rate accelerated for a second straight month in November, the statistics office said on Monday, against an expectation for price pressures to ease. The consumer price index rose 3.23 percent in November from a year earlier, Central Statistics Agency (BPS) chief Suhariyanto said, attributing the increase to rising prices of some food products and airfares. On a monthly basis, it rose 0.27 percent.
October’s rate was 3.16 percent, while a Reuters poll had expected a November annual inflation rate of 3.15 percent.
The November rate was still well within the central bank’s target range of 2.5 percent to 4.5 percent for 2018.
The annual core inflation rate, which excludes government-controlled and volatile prices, also picked up more than expected in November to 3.03 percent, from 2.94 percent in October. The poll had expected a core inflation rate of 2.97 percent.
Bank Indonesia has hiked interest rates six times this year by a total of 175 basis points since May to support the rupiah, despite benign inflation. The currency plumbed levels not seen since 1998 earlier this year but has sharply strengthened last month due to improving global investor sentiment.
Questions & Answers
Q.What specifically caused the unexpected rise in inflation during November?
What specifically caused the unexpected rise in inflation during November?
The Central Statistics Agency chief attributed the increase in the consumer price index to rising prices of certain food products. He also mentioned airfares as a contributing factor to the acceleration.
Q.How does the November inflation rate compare to the central bank’s target for this year?
How does the November inflation rate compare to the central bank’s target for this year?
The 3.23 percent annual inflation rate for November falls within the central bank’s target range. Their stated goal for 2018 is between 2.5 percent and 4.5 percent.
Q.How did the annual core inflation rate perform in November compared to expectations?
How did the annual core inflation rate perform in November compared to expectations?
The annual core inflation rate rose to 3.03 percent in November, which was higher than the 2.97 percent predicted by the Reuters poll. This figure was also up from 2.94 percent in October.
Q.Has the central bank taken any action this year to address economic conditions?
Has the central bank taken any action this year to address economic conditions?
Bank Indonesia has increased interest rates six times this year, totalling 175 basis points since May. These actions were taken to support the rupiah currency.
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