Indonesian inflation over 7% YOY mostly due to food price increases

Inflation has risen above 7% in Indonesia to 7.02%.  Food prices increased by over 16%.  The most recent GDP growth numbers topped 6.9%.  And today we have  Bernanke say that the reason inflation is picking up in emerging market is due to economic growth.  But even he knows that inflation does not always accompany economic growth.  China enjoyed both high economic growth and low inflation for many years.  Money is fungible, and money is shifting out of the Western developed nations into countries like Indonesia.  To say otherwise just ignores the facts.

Indonesia is relatively peaceful now, but with food prices rising so quickly, things could change overnight.   Via Indostat:
The inflation in January 2011 was mainly caused by price increases of several commodities, i.e.: rice, small chili, fresh fish, red chili, shallot, rental house fee, cooking oil, potato, cooked rice and  side dishes served together, filter cigarette, passenger plane fare, gasoline, preserved fish, cucumber, green chili, grape, brick, leasing house fee, housemaid cost, umbrella, medical specialist fare, recreation costs, and motorcycle. Meanwhile, the prices of the following commodities were decreased, i.e.: tomato (vegetable) and garlic.


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