JAKARTA- Indonesia’s consumer price index rose to a two-year high in March, official data showed on Friday, as economists warned inflation would creep up further as the government raised a gasoline price and the value-added tax rate.
Annual inflation rose to 2.64 percent last month, the highest since April 2020 and faster than the 2.56 percent forecast in a Reuters poll, on rising prices of chilli, cooking oil, eggs, household fuel and gold jewellery.
The core inflation rate, which strips out volatile food and government-controlled prices, also rose to 2.37 percent, a touch higher than the 2.33 percent expected in the poll.
The central bank has a target to keep headline inflation within a range of 2 percent to 4 percent.
However, Bank Indonesia’s (BI) Governor Perry Warjiyo has in recent months vowed to keep interest rates at their record low until BI sees signs of a fundamental price rise, which it gauges with core inflation.
Separately on Friday, state energy firm Pertamina raised the price of its 92-octane gasoline by nearly 40 percent to cut losses amid a surge in global oil prices due to the Russia-Ukraine war.
Although the fuel is less popular than the subsidised 90-octane gasoline, economists say the move will add inflationary pressure just ahead of the fasting month of Ramadan, when inflation typically peaks in the Muslim-majority country. — Reuters
