ANN/THE STAR – Indonesia’s inflation surprised on the upside in December, challenging the central bank and market’s view that price pressures were well on the wane.
Consumer prices rose 5.51 per cent from a year ago, driven by higher costs of petrol, household fuels, air freight rates and transport fares, the nation’s statistics agency said on Monday. That beats even the highest forecast in a Bloomberg survey of economists, which ranged from 5.18 per cent to 5.47 per cent.
Core inflation, which strips out the impact of government-administered and volatile food items, rose 3.36 per cent, in line with the 3.39 per cent market consensus.
The Bank of Indonesia (BI) slowed down its tightening pace in December, raising its key rate by a quarter-point after three consecutive months of half-point moves as it expected inflationary pressures to wane. The monetary authority saw consumer price increases decelerating to 5.4 per cent by the year’s end.