Economists expect inflation will continue to rise in the coming weeks but then fell again next year.

Inflation Up, Manufacturing Sector Slows Due Fuel Price Increase

Workers check the quality of the yarn in the factory in Bandung.

Economists expect inflation will continue to rise in the coming weeks but then fell again next year.

JAKARTA

Indonesia's inflation rate surged and manufacturing activity declined to the lowest point following the increase in fuel oil (BBM), according to data released on Monday (1/12).

November inflation jumped to 6.23 percent year-on-year from 4.83 percent in October, according to data from the Central Statistics Agency (BPS). Economists expect inflation will continue to rise in the coming weeks but then fell again next year.

The increase in fuel prices also contributed to the slowdown in manufacturing activity, which has been weakened in recent months due to a collapse in demand, according to Indonesian index of HSBC.

The size of the index fell to 48.0 in November from 49.02 in October, the lowest since the launch of the index in 2001. A reading below 50 indicates contraction, while above it signifies growth.

"The increase in subsidized fuel prices may have increased prices, although we note that both domestic and external demand has weakened even before the increase," said HSBC economist Su Sian Lim.

In a more positive note, official data released Monday showed Indonesia's trade balance swung into a small surplus of US $ 20 million in October from a deficit of $ 270 million in the previous month due to lower prices of crude oil import bill cut. (AFP)?VOA)