Indonesia’s Inflation Rate Slightly Increase in June

Indonesia’s annual inflation rate in July will probably rise slightly because of higher food costs although the momentum was maintained within the target range of the central bank, according to the poll of Reuters.

The forecast of the consumer price index (CPI) is anticipated to increase by 3.24 percent in July based on the reports of 12 economists by Reuters, slightly higher than the 3.12 percent annual pace in June.

The chief economist of Maybank Indonesia, Juniman, costs of chicken, beef, and eggs, including the non-subsidized fuel as the primary driver of cost hike.

Bank Indonesia (BI) governor, Perry Warjiyo, anticipates the headline inflation rate estimated at 3.5 percent, throughout the year of 2018. The midpoint of the central bank between the range of 2.5 and 4.5 percent target range.

Based on the reports, the annual core inflation rate, excluding government-controlled and volatile food prices, was at 2.74 percent, just slightly above the 2.72 percent rate in June.

Benchmark policy rate of BI rose to 5.25 percent with a total of 100 basis points for three months since the middle of May as they control the currency rate through the inflation-targeting framework and dealing with the exchange rate to the U.S. dollar.