Jakarta – Indonesia has seen its highest inflation in more than two years in January, driven by increases in foods, beverages, tobacco products prices, and utility costs.
The Central Statistics Agency (BPS) reported Wednesday that the country's consumer price index, a basket of wide consumer goods and services prices used to measure inflation, rose 2.18 percent last month from the same month a year ago. That was the fastest increase since December 2019. The headline inflation was 1.87 percent in December 2021.
Core inflation, which excludes volatile foods and administered prices like energy and fuel, was at 1.84 percent, slowing from 2.32 percent in December.
Foods, beverages, and tobacco products inflation accelerated to 3,54 percent last month from 3.09 percent in December. The foods, beverages, and tobacco products contributed 53 percent to the headline inflation in January.
The government increased cigarette excise by about 14 percent starting this year due to its long-standing effort to curb consumption of cancer-inducing products. Households across the country had also put up with spiking cooking oil prices that continue to be in scarce supply after the government imposes a price cap policy.
Utility costs rose by 1.24 percent in January, contributing 19 percent to the month's headline inflation. Last December, utility inflation was at 0.76 percent, accounting for less than four percent of the month's headline inflation.
Last month, the state energy company Pertamina raised liquified petroleum gas (LPG) prices, a fuel used in most kitchens across Indonesia, to cope with a global energy price increase. Today, a 12-kilogram, unsubsidized LPG canister fetches Rp 175,000 in Jakarta, up 14 percent from the previous price.
On the other hand, telecommunication and communication prices saw a decline. The costs fell 0.24 percent in January from the same month last year.
Still, the latest inflation reading was unlikely to budge Bank Indonesia, the country's central bank, to change its benchmark interest rate, kept at 3.5 percent for seven months in a row. Last month, the central bank said that inflation was still under control, within its target of two to four percent this year.