Indonesia inflation rate dips to 3.39% in September

Food prices have dipped.

Indonesia’s inflation rose at a slower pace in September after growing 3.39% YoY compared from August’s 3.49% YoY, reports UOB Global Economics & Markets Research.

Slowing price growth in the food market drove the deceleration. On a monthly basis, Indonesia recorded deflation of 0.27% MoM, mostly due to lower prices of red chili, shallot, chicken, eggs, and tomato, bringing the year-to-date inflation to 2.2%.

Meanwhile, increasing gold prices pushed prices of accessories and jewelry upwards, moving clothing items’ to 5.65% YoY, an increase from a previous 5.18%.

Education and transport inflation remained relatively stable YoY at 3.41% and 1.85% respectively, the report added.

The annual core inflation rate picked up slightly to 3.32% YoY in September from the previous month’s 3.30%; whilst volatile prices slowed to 5.49% from 5.96% over the same period.September’s inflation print remained within the central bank’s target range of 2.5-4.5%.

UOB Research forecasts that despite the potentially prolonged stability of oil prices, inflation will remain unchanged at 3.2% in 2019, a slightly higher rate compared to 3.1% in 2018 as food and transport inflation may pick up at a faster pace by the end of the year.