Inflation in Indonesia

The Indonesian government and financial media should seriously consider calculating and reporting inflation as it is done in the United States before someone gets hurt. In this report, there is nary a mention of core inflation (which is probably well-contained), and it is likely they include real home costs rather than a benign proxy such as owners-equivalent-rent for shelter.

Indonesia's inflation rate surged to nearly 18 percent in October, the highest rate in four years, largely reflecting the government's move to hike domestic fuel prices...

Fuel price increases are a politically sensitive issue in Indonesia, where a big increase in 1998 triggered rioting that helped topple former dictator Suharto.

President Susilo Bambang Yudhoyono "is very concerned (with the situation) and had ordered the (economics ministers) to ... take necessary steps to ease the inflation," spokesman Andi Mallarangeng said after the inflation figure was released.

But Economy Minister Aburizal Bakrie played down concerns over inflation, describing the surge in October as a "temporary phenomenon."

Riots are temporary phenomenon too, Mr Bakrie - be careful.

Here's a guess at what the economic ministers might do to ease inflation - change the calculation! Come up with a lower number! Quality adjustments, substitution, ex-energy - figure it out before someone gets killed!