JAKARTA, Jan. 2 (Xinhua) — Indonesia ended 2023 with lower inflation, recorded at 2.61 percent year-on-year in December, a drop compared to the previous month’s 2.86 percent, Statistics Indonesia (BPS) announced on Tuesday.

The decline in inflation, which is in line with the central bank’s target of 2 to 4 percent in 2023, was driven by increases in the prices of food, drinks and cigarettes.

“Government has set tariff increases by an average of 10 percent since January 2023,” said acting head of BPS Amalia Widyasanti in a press conference.

Throughout 2023, Bank Indonesia or the central bank of Indonesia has twice raised the benchmark banking interest rate, which is now recorded at 6.00 percent, to maintain the stability of the rupiah currency and ensure inflation remains under control.

The year 2023 was also marked by a downward trend in crude oil prices on the international market, triggering adjustments to non-subsidized fuel prices by the national oil company Pertamina.

Meanwhile, El Nino since March 2023, which led to crop failure, rice price hike and an increase in rice imports, is expected to continue until at least April 2024.

This year, the central bank is targeting inflation in a new range of 1.5 to 3.5 percent.