Indonesian headline inflation likely to have accelerated slightly in October

The headline inflation rate of Indonesia for the month of October is set to be released this week. According to a DBS Bank, the consumer price index is likely to have risen to 3.1 percent year-on-year from September’s rate of 2.88 percent. The rise in fuel prices that was effective from 10 October would be reflected in the October headline inflation.

The average rise, which accounts for less than 30 percent of consumption, was 16 percent. The effect would be restricted as the biggest share of fuel. On another account, rice price has risen in the past two months after a continuous deflation since the start of the year adding to this month figure.

“We believe that this year average inflation will remain stable as the government has committed to keep Premium and Pertalite prices fixed and rice price stable by allowing rice imports when needed to maintain adequate domestic supply”, added DBS Bank.