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Indonesia's inflation of 3.35% lowest in past 5 years

Staff writer |
Indonesia's year-over-year inflation eased to 3.35% in December from 4.89% in November, thanks to a high base of comparison last year after the government raised subsidized fuel prices, the official Central Statistics Agency said.

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That means 2015 inflation was well within Bank Indonesia's 3%-5% target, which may encourage the central bank to cut interest rates later this month if global market remain calm, economists said.

Compared with a month earlier, prices of goods and services rose 0.96% in December, accelerating from 0.21% in November, as prices of basic food commodities rose 0.65%, the agency said.

"The 3.35% inflation was the lowest in the past five years," the agency's chairman, Suryamin, said.

The median forecast for year-over-year inflation from 10 regional economists polled by The Wall Street Journal was 3.02%%, while the median forecast of seven of those economists who made month-on-month predictions was 0.64%.

Core inflation, which excludes prices of volatile items and those controlled by the government, eased to 3.95% from 4.77% in November, reflecting weaker domestic purchasing power as well as the rupiah's rebound against the dollar.

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