Indonesia's Inflation Rate Eases to 3.60 Percent Y/Y in April 2016

A female trader A female trader sorts onions and vegetables for sale at a traditional market. Basic needs items to be major contributors to inflation. — A female trader A female trader sorts onions and vegetables for sale at a traditional market. Basic needs items to be main contributors to inflation.

Jakarta, 25 Rajab 1437/03 May 2016 (MINA) – Indonesia’s April deflation of 0.45 percent month-to-month (m/m) was slightly higher than estimated (the general consensus among analysts was 0.29 percent m/m deflation in April 2016).

Traditionally, Indonesia experiences deflation in April as food prices ease due to the harvest season. This year, however, deflationary pressure was higher than usual as, per 1 April 2016, Indonesia’s premium gasoline and diesel fuel prices were cut by IDR 500 (approx. USD $0.04) per liter, thus curtailing transportation costs. Indonesia’s annual inflation rate now stands at 3.60 percent (y/y).

On Monday (02/05) the Cenral Statistics Agency(BPS) released the latest inflation data, Mi’raj Islamic News Agency (MINA) reported, quoting indonesia-investments.com.

The agency stated that the lower fuel prices resulted in a 1.60 percent (m/m) decline in transportation costs in April, while the price of rise (the main staple food for Indonesians) fell 1.2 percent (m/m) due to the harvest season.

Meanwhile, core inflation – which excludes volatile food and administered prices such as subsidized fuel and electricity – eased to 3.41 percent (y/y), from 3.50 percent (y/y) in the preceding month.

In the months ahead inflationary pressures are expected to grow as the fasting month of Ramadhan will start in early June.

Although this is a month of self-control, consumption on food items (in the early morning or in the evening), clothes, shoes and bags usually increases. (T/R07/R01)

Mi’raj Islamic News Agency (MINA)