(Insider Stories) - Indonesia's inflation rate rose to its highest level in more than four years in July as the increase in subsidized fuel prices and seasonal increase in food prices during the Muslim fasting month pushed consumer prices higher.
The official Central Statistics Agency said Thursday the on-year inflation accelerated to 8.61% in July from 5.90% in June. July's inflation rate was the highest since January 2009 when it was 9.17%. From a month earlier, prices were up 3.29%, compared with a 1.03% rise in the preceding month.
Head of the statistics agency, Suryamin, said in a press conference that transportation and foodstuffs were the main drivers for the spike in consumer price index.
Core inflation, which excludes volatile and administrative price components rose to 4.44% in July, accelerating from 3.98% in June.
Bank Indonesia officials have said that the impact of fuel price increase on the headline inflation will start waning in August that may allow it to take a breather in raising its benchmark rate after a total 75-basis point hike in the past three months.
After the government on June 22 took the unpopular step to raise prices of low-octane gasoline by 44% and diesel fuel by 22% to prevent energy subsidies from breaking the state budget, the central bank has shifted its focus to managing prices from supporting growth.
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