Inflation is low and stable in 2018, remaining within the target corridor of 3.5±1% (yoy). CPI inflation was recorded at 0.62% (mtm) in December 2018 in line with cyclical yearend trends. Therefore, inflation in 2018 stood at 3.13% (yoy), which marks the fourth consecutive year that headline inflation has remained on target.
Low core inflation was also maintained in line with policy consistency by Bank Indonesia (BI) to maintain exchange rate stability and anchor rational inflation expectations. Price pressures on volatile foods were effectively controlled thanks to adequate supply and lower international food prices. Furthermore, inflationary pressures on administered prices were also mild due to minimal government policy prior to the general election. BI projected the inflation target at 3.5±1% in 2019.
