Inflation Drops Sharply in October

JAKARTA ~ Indonesia’s inflation rate eased sharply in October to 6.29 percent, a year after a massive fuel price hike caused a spike in overall prices, official data showed this week.

The single-digit result was within analyst expectations and down strongly from September’s year-on-year rate of 14.55 percent.

Central Bureau of Statistics head Rusman Heriawan said the consumer price index (CPI) in October rose 0.86 percent from September, compared to September’s rise of 0.38 percent.

The rise was led by food prices, which increased 2.17 percent month-on-month due to rising demand and consumption during Idul Fitri.

Food prices typically spike during the month as people stock up on delicacies for the major holiday.

Heriawan told a press briefing on Wednesday that year-on-year inflation had fallen back to the single-digit level as the high base effect from a fuel price hike last October had dissipated.

“This gives us optimism that year-end inflation will be lower than 10 percent,” he said.

For the January-October period, inflation was 4.96 percent.

Last year’s fuel price hike caused a large spike in inflation and interest rates were jacked up in a bid to ease pressure on prices. Interest rates have since started to ease and the latest figures should allow the central bank further room to lower them.

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