Indonesia_Inflation_January_2023

Indonesia:  January 2023 Inflation Rate

Lower on a Monthly and Annual Basis

 Indonesia’s inflation rate for January this year was released at an annual rate of 5.28% (December: 5.51%), and 0.34% on a monthly basis (December 0.66%).

Declining inflation rates last month indicate spillover effect of the fuel price increase by the government in September last year has come near to its end.

In January this year, the government set the fuel surcharge lower to 10% from the previous 15%. Domestic airlines were reported to have increased the fuel surcharge since April last year. Also, the declining inflation in January was driven by the deflation of items in the volatile food categories such as tomatoes, birds eye chilly,  chicken egg, and green mustard.

Since 2005, the central bank Bank Indonesia and the government have established methods to control prices in the country’s archipelago. Moves to curb inflation include the monitoring supply, distribution spans, and price volatilities of Indonesia’s strategic consumers’ food items.

With the latest figures, the country’s central bank Bank Indonesia states that the core and headline inflation target of 3±1% can be achieved in the first and second semesters this year respectively. Against the background of the post-COVID-19 pandemic recovery stage, managed inflation figures (in Charts 1 and 8) provide a chic starting point for real economic growth this year and after.

Cheers,