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Annual inflation falls to lowest rate in 5 years

Annual inflation falls to lowest rate in 5 years

WASHINGTON: Annual inflation has fallen to the lowest rate in five years, as consumer prices last year increased by just 3.35 percent. Monthly inflation in December 2015 was measured at 0.96 percent, driven largely by higher food prices, the Central Statistics Agency (BPS) reported on Monday.

The full-year inflation rate in 2015 was the lowest since 2010, when prices increased by 6.96 percent after scoring a 2.78 percent inflation in 2009. It fell back to 3.79 percent in 2011, but rose to 4.3 percent in 2012. In 2013 it soared to 8.38 percent, almost the same as last year’s rate.

“In 2014, the full-year inflation rate was 8.36 percent, thus the 3.35 percent [rate] in 2015 is the lowest, below the government’s target at 4 plus/minus 1 percent,” BPS Head Suryamin said at a press conference in Jakarta on Monday.

In December 2015, food prices recorded the highest increase at 3.2 percent. Packaged foods, beverages, tobacco and cigarettes rose by 0.5 percent, while household goods, water, fuel and electricity posted a 0.4 percent price rise.

On the opposite end, transportation, communication and financial services recorded monthly deflation of 1.53 percent, Suryamin said. Unlike in previous years, when fuel was the main driver of inflation, rice took over that role in 2015. The government reacted to this development with a subsidy program called ‘rice for the poor’ (raskin).

Merauke (Papua) recorded the highest inflation in December at 2.87 percent, while the lowest rate was measured in Cirebon at 0.27 percent. “Core inflation was 0.23 percent, bringing full-year core inflation to 3.95 percent,” Suryamin said.