Indonesia November inflation cools further but stays above target

A vendor selling seafood serves her customers, amid the spread of the coronavirus disease (COVID-19) outbreak, at a traditional market in Jakarta, Indonesia, March 1, 2021. REUTERS/Willy Kurniawan/File photo

JAKARTA – Indonesia’s inflation eased in November but stayed above the central bank’s target range for the sixth consecutive month amid rising food prices and higher transportation fares, official data showed on Thursday.

The headline annual inflation rate eased to 5.42 percent in November, compared with 5.71 percent in October and 5.5 percent expected by analysts polled by Reuters. Bank Indonesia’s inflation target range is 2 percent to 4 percent.

The annual core inflation rate, which excludes government-controlled prices and volatile food prices, edged lower to 3.3 percent from 3.31 percent in October. The Reuters poll had expected a rate of 3.4 percent.

Among the biggest contributors to inflation, were fuel prices, air fares and inner city transportation costs, Setianto, the deputy head of Statistics Indonesia, told reporters, following fuel price adjustments in September.

Meanwhile, the price of rice, a staple food in Indonesia, was still rising last month, although the pace had slowed, he said.

Bank Indonesia (BI) would maintain a front-loaded and pre-emptive interest rate policy next year to control inflation, governor Perry Warjiyo said on Wednesday at the central bank’s annual meeting with financial sector stakeholders.

BI was seeking to anage inflation expectations, which Warjiyo said remained high, and steer core inflation back into its target range within the first half of 2023.