September CPI: Raya Blues Again

Almost loss in the shuffle of Friday's budget was the CPI report for September. Not that there were any surprises (index numbers, log annual and monthly changes, 2005=100):





As the impact of the fuel price hikes in July fade, you'll see inflation ticking up again. The faster pace of price increases in September can be squarely blamed on Ramadhan, for obvious reasons. To underscore this, here's the chart for my pseudo-core inflation measure(index numbers, log annual changes, 2005=100):





Note that even as growth in the main index started climbing, growth in the core index has dropped. Reading the numbers from DOS' report shows food, transport and miscellaneous items contributed to the bulk of the increase.

Otherwise, I'd consider September's developments encouraging. Price pressures indicate higher economic activity, which augurs well for a higher consumption reading for 3Q 2009. But again, that's really just the Raya effect, and not necessarily a symptom of a more solid rebound in the economy.