Jakarta (VNA) – Indonesia's Central Statistics Agency (BPS) has announced that the country’s inflation rate hit 1.87 percent in 2021.

It was lower than the 2-4 percent target set by the country's central bank but gradually increased since September after the restrictions on movement were eased, the BPS said.

BPS chairman Margo Yuwono said they saw remarkable growth in core inflation in the last three months of the year, indicating an improvement in people’s purchasing power.

Inflation reached 0.57 percent in December alone, the highest level in the past two years. He attributed it to the fact that people increase spending during Christmas and New Year holidays, mainly on food, beverages and tourism. Specifically, food, beverage and tobacco were the main drivers behind high inflation in December. The items that saw price increase sharply include chili, cooking oil, eggs, chicken, fresh fish and vegetables.

Faisal Rachman, an economist at Bank Mandiri in Jakarta said the monthly and annual inflation rates were 0.53 percent and 1.83 percent higher than forecasts. 

The inflation rate is projected at 3.3 percent in 2022, he said.

According to Faisal, consumer prices in the healthcare, information and communication sectors are expected to decrease due to a decline in spending in the context of living with the COVID-19 pandemic situation.

The inflation tends to increase next year, while the easing of restrictions on community activities and a high vaccination record will accelerate the speed of cash flow, he said./.