Despite wide fluctuations of international oil prices, slightly higher consumption growth, and rapidly depreciating currency, inflation in 2018 remains remarkably low, with headline inflation at 3.13% (yoy) in December 2018. Historically, faster consumption growth drives demand for goods and services and thus tending to push inflation higher. Similarly, without additional fuel subsidy budget, higher oil prices would normally push subsidized fuel prices upward, affecting prices of transportation of goods and services and thus increasing prices of most goods and services simultaneously. Also, with more than 90% of imports going towards input and capital goods, depreciating currency would traditionally also accelerate inflation.

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