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Indonesia’s inflation, trade deficit higher than projected

Indonesia’s inflation rate in December 2014 jumped to 8.36 percent year-on-year from 6.23 percent in November and its trade balance swung to a deficit after the country hiked fuel prices by 30 percent, according to the Statistics Indonesia (BPS).
Indonesia’s inflation rate in December 2014 jumped to 8.36 percentyear-on-year from 6.23 percent in November and its trade balanceswung to a deficit after the country hiked fuel prices by 30 percent,according to the Statistics Indonesia (BPS).

AFP quoted BPS assaying that transportation cost adjustments in December that pushed upfood prices during the holiday season were the main reason for thehigher-than-expected inflation.

The country suffered a tradedeficit of 425.7 million USD in November 2014 after enjoying a smallsurplus of 20 million USD in the previous month.

According toDavid Sumual, chief economist at Indonesia 's Bank Central Asia,these data are surprising. Tthe inflation is much higher thanexpectation, while the trade deficit is bigger than estimate.

In addition, manufacturing activities dwindled in December 2014 asHSBC said its Purchasing Managers' Index for Indonesia fell to arecord low of 47.6 points .

However, economists spokehighly of the Indonesian Government’s move to scrap the gasolinesubsidy and fix the subsidy for diesel fuel for 2015.-VNA
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