As fuel subsidies fall in Indonesia, inflation running at 7-year high

Robert Besser
06 Oct 2022, 13:19 GMT+10

Due to rising transportation costs after a fuel price hike, Indonesia's inflation rate in September surged to its highest level since October 2015
In September, the annual inflation rate rose to 5.95 percent, up from 4.69 percent in August
The annual core inflation rate, which excludes government-controlled prices and volatile food prices, accelerated in September to 3.21 percent, compared with 3.04 percent in August

JAKARTA, Indonesia: Due to rising transportation costs after a fuel price hike, Indonesia's inflation rate in September surged to its highest level since October 2015, Statistics Indonesia data reported this week.

In September, the annual inflation rate rose to 5.95 percent, up from 4.69 percent in August.

The annual core inflation rate, which excludes government-controlled prices and volatile food prices, accelerated in September to 3.21 percent, compared with 3.04 percent in August and analysts' forecasts of 3.60 percent.

"September's inflation was mostly affected by the rise in fuel prices and inflation in the transportation sector," said Margo Yuwono, head of Statistics Indonesia.

As several regions have yet to increase their transportation fares, inflation could increase further in October.

As part of the government's efforts to reduce spending on subsidies, Indonesia raised subsidized fuel prices by some 30 percent in early September.

Also, in its September meeting, Bank Indonesia (BI) increased policy interest rates by 50 basis points to control inflation, which is expected to peak at just over 6 percent, compared to its target range of 2 to 4 percent.

Bank Danamon has revised up its inflation outlook for the end of 2022 to 6.5 percent from 4.5 percent, said Irman Faiz, an economist at the bank.

"On the policy front, we expect BI still has 100 bps of space to hike the policy rate from the current level this year, as monetary policymakers have vowed to tame inflation down to their target range by 2023," he added, as quoted by Reuters.

Watch latest videos

News RELEASES

Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Raleigh Times.

More Information

55 ℉

Mostly Cloudy in Raleigh/Durham

Business

Section

Tech stocks outperform Tuesday, Nasdaq Composite gains

NEW YORK, New York - U.S. stocks spent most of Tuesday meandering, with the major indices closing out the day ...

Strike cost Ford 100,000 vehicles in sales, $1.7 billion in profit

DEARBORN, Michigan: This week, Ford said a six-week United Auto Workers (UAW) strike cut its sales by some 100,000 vehicles ...

Biden administration introduces new rule to reduce methane emissions

WASHINGTON D.C.: This week, the Biden administration adopted a new rule aimed at reducing methane emissions, which targets the role ...

Tesla to start delivering Cybertrucks: Musk

AUSTIN, Texas: During an event held this week in Austin, Texas, Tesla CEO Elon Musk said the electric vehicle (EV) ...

U.S. stocks start week in divided territory, dollar jumps

NEW YORK, New York - U.S. stocks closed mixed on Monday following on from last week's volatility."Digestion is the word ...

Microsoft president denies super-intelligent AI possible in 12 months

REDMOND, Washington: Microsoft President Brad Smith said there is no chance of super-intelligent artificial intelligence (AI) being developed within the ...

North Carolina

Section