Indonesia’s consumer prices index (CPI), which measures inflation, rose to 3.49 percent in August year-on-year, the highest level in 19 months, as education spending rose at the start of the 2019-2020 academic year, according to BPS data released on Monday.

Inflation in the education, recreation and sports categories rose 1.21 percent yoy last month, with tuition fee increases in all education levels, from elementary school to higher education, contributing 0.09 percent to the overall headline inflation.

Although the headline inflation rate remained well within the government’s 3.5 percent target and the central bank’s target of between 2.5 percent and 4.5 percent, BPS head Suhariyanto said recent investors’ gold rush and prolonged drought could create inflationary pressures going forward.

“We know that the global economic condition is still clouded with uncertainties, prompting investors to shift to safer assets such as gold, the price of which has recently increased,” Suhariyanto told a press briefing at the BPS headquarters in Central Jakarta.

The price increase of gold has turned the clothing category – under which the commodity is categorized – into the second-highest inflation driver in August at 0.88 percent yoy, while the precious metal also contributed 0.05 percent to August’s headline inflation.

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