News, Articles & Reviews

Jakarta (ANTARA News) - Indonesia's annual inflation accelerated in May to its fastest pace in 20 months after the government raised fuel prices to deal with a ballooning subsidy bill amid high global crude oil prices, raising worry the central bank may raise interest rates for the second time this year.

The consumer price index rose 10.38 percent in May from a year ago and by 1.41 percent from April, said Rusman Heriawan, chairman of the Central Bureau of Statistics.

The inflation figures were within market expectations. Nine economists polled by Thomson Financial had expected consumer prices to rise between 0.5 percent and 2.24 percent for the month and between 9.4 percent and 11.29 percent on year.

On May 24 the government raised fuel prices by an average 28.7 percent and Heriawan said the effect of the fuel price hike will still be felt in June, "but the magnitude may be smaller".

Source