High chilli prices feed inflation in Indonesia ahead of central bank’s rate decision

[JAKARTA] The tiny but mighty chilli padi – or bird’s eye chilli – is having an outsized impact on inflation in Indonesia, exposing gaps in the country’s food production and distribution system that the government still struggles to overcome.

This is unlikely to adversely impact Bank Indonesia’s interest rate decision on Thursday (Dec 21), but will bear watching.

Chilli prices reached another record on Monday, with some regions reporting prices above 100,000 rupiah (S$10) per kg. This was 50 per cent higher than in October, according to data compiled by the Jakarta Food Information portal.