Indonesia's annual inflation rate quickened to 4.35% in June 2022 from 3.55% in May, above market consensus of 4.17% and breaching the central bank's target range of 2 to 4%. This was the highest reading since June 2017, with food prices jumping 6.23%, the most since November 2016, as consumption strengthened further with activities returning to normal following a drop in COVID-19 cases and a lift in mobility curbs.
Additional upward pressures also came from cost of housing & utilities (2.14% vs 2.12% in May), transport (5.45% vs 4.77%), furnishings (4.77% vs 4.39%), food services & restaurant (3.67% vs 3.57%), education (1.69% vs 1.71%) and clothing (1.38% vs 1.10%). Meantime, cost of information, communication & financial dropped further (-0.23% vs -0.20%). Annual core inflation rate accelerated to a 25-month high of 2.63% from 2.58% in May, and compared to consensus of 2.72%. On a monthly basis, consumer prices were up 0.61% in June, surpassing forecasts of a 0.44% rise.
Export Prices Increase
Export Prices in Indonesia averaged 103.93 points from 1998 until 2022, reaching an all time high of 202.30 points in May of 2022 and a record low of 33.20 points in July of 1999.
In Indonesia, Export Prices correspond to the rate of change in the prices of goods and services sold by residents of that country to foreign buyers. Export Prices are heavily affected by exchange rates.
Producer Prices Increasing
Producer Prices in Indonesia increased to 111.43 points in June from 110.69 points in May of 2022. In the long-term, the Indonesia Producer Prices are projected to trend around 113.11 points in 2023 and 116.50 points in 2024, according to the econometric models.
Business Confidence in Indonesia is expected to be 10.00 points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the Indonesia Business Confidence is projected to trend around 6.00 points in 2023, according to the econometric models.