Gayatri Suroyo and Fransiska Nangoy, Jakarta – Indonesia in January reported its quickest pace of inflation in nearly three years, its statistics bureau said on Monday, as it also released surprisingly strong export and import growth in December.
The inflation rate accelerated to 3.55 percent in January from 2.92 percent a month prior, below the 3.78 percent that was expected by analysts polled by Reuters.
The January reading was slightly above the central bank's target range of 1.5 percent to 3.5 percent and marked the fastest pace since May 2023, LSEG Refinitiv data showed.
Inflation in Southeast Asia's largest economy has remained within or under Bank Indonesia's preferred range since mid-2023, allowing the central bank to embark on a rate-cutting cycle amounting to 150 basis points between September 2024 and September 2025.
A senior official at Statistics Indonesia (BPS), Ateng Hartono, said the relatively high reading in January was due to a low base effect because the government gave electricity tariff discounts to some customers in the early months of 2025 to help economic growth.
"In March or April, I'm sure inflation rate will normalize as long as there is no other government policy affecting the rate," he said.
The annual core inflation rate, which strips out government-controlled prices and volatile food prices, picked up to 2.45 percent in January from 2.38 percent in December. The Reuters poll had expected 2.37 percent.