By I Made Sentana

JAKARTA--Inflation in Indonesia gathered pace in January after the government stopped subsidizing electricity prices for certain households and increased the vehicle tax.

The consumer price index, which is used to gauge inflation across the country, rose 3.49% in January from a year earlier, faster than the 3.02% in December. From a month earlier, prices of goods and services rose 0.97%, also faster than 0.42% in December, the official Statistics Agency said Wednesday.

The median forecast of 10 economists polled by The Wall Street Journal was for 3.21% year-over-year inflation growth in January and 0.71% month-over-month.

The agency said transportation costs rose 2.35% in January from a month earlier. Meanwhile, housing costs, which include electricity, gas, and water, rose 1.09%.

Core inflation, which excludes the prices of volatile commodities and those regulated by the government, accelerated to 3.35% year-over-year in January from 3.07% in December.

The central bank predicted year-end inflation will rise from 3.02% last year, but remain within its 3%-5% target.

Write to I Made Sentana at I-Made.Sentana@wsj.com.

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January 31, 2017 23:42 ET (04:42 GMT)

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