Commodity Prices and Inflation in Indonesia: Does the Pass‐Through Really Matter?

Mansor Ibrahim and Xuan‐Hoa Nghiem

Australian Economic Papers, 2026, vol. 65, issue 2, 149-163

Abstract: We estimate the commodity price pass‐through to consumer price and food price inflation for the case of Indonesia using quarterly data from Q1 2000 to Q3 2023. In the analysis, we consider the aggregate commodity price as well as its two components, namely, energy price and non‐energy price. Employing the local projections method, we find evidence supporting significant spillover from changes in aggregate commodity price, energy price and non‐energy price to consumer price inflation, which is apparent when the commodity price changes are positive, and the inflation level is high. We also document significant responses of the food prices to changes in the commodity prices under high inflation environment. Among the three commodity prices, the non‐energy price seems to have the largest pass‐through to both consumer and food price inflation. Moreover, as compared to its effects on consumer price inflation, the non‐energy price pass‐through to food price inflation is relatively stronger. These results bear important implications for monetary policy responses amid wide swings in commodity prices.

Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/1467-8454.70018

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ausecp:v:65:y:2026:i:2:p:149-163

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0004-900X

Access Statistics for this article

Australian Economic Papers is currently edited by Daniel Leonard

More articles in Australian Economic Papers from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().