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Indonesia's inflation seen edging up to 3.11% in January: poll

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Indonesia's annual inflation rate likely edged up in January as prices for some goods and services increase due to cuts in government subsidies, a Reuters poll showed.

[JAKARTA] Indonesia's annual inflation rate likely edged up in January as prices for some goods and services increase due to cuts in government subsidies, a Reuters poll showed.

The median forecast from 12 analysts was for an annual inflation rate of 3.11 per cent in January, from 3.02 per cent in December.

The poll's median for annual core inflation in January was also 3.11 per cent, from the previous month's 3.07 per cent.

ANZ said one factor creating inflationary pressure was a government decision to end an electricity tariff subsidy for 19 million households.

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Bank Indonesia (BI) expects inflation to be more than 4 per cent this year, Governor Agus Martowardojo said last week, adding that the central bank aims to keep it inside a 3-5 per cent target band.

Last year's relatively low inflation was a main factor letting BI cut its benchmark rate six times, by 150 basis points.

NatWest Markets' economist Vaninder Singh said inflation will probably creep towards the top of BI's target band by 2017's third quarter.

BI has "come to the end of its easing cycle," Mr Singh said, predicting it will have to raise rates this year.

REUTERS

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