On an annual average basis, consumer price inflation accelerated to 5.1% in 2010, from 4.8% in 2009, and inflationary pressures will rise again this year as economic activity accelerates. A sharp increase in the international price of oil and non-oil commodities, notably grains, will also exert upward pressure on domestic prices. However, average inflation should remain just within BI's 4-6% target range. After accelerating in January to 7% year on year, the fastest pace in 21 months, inflation slowed in each of the following three months, with prices rising by 6.2% in April. The rupiah's continued appreciation against the US dollar, and the start of the main domestic rice harvest in March, should limit inflation in the coming months. Inflation will slow to 5.8% in 2012, before accelerating to 6.2% on average in 2013-15. The primary risk to our forecast comes from the possibility that high global oil prices could force officials to raise domestic fuel prices to keep the budget deficit under control, especially given that their assumption that oil prices will average US$80/b this year looks unrealistically low. But there is little sign that the government is contemplating raising prices. In fact, it has repeatedly postponed plans to end the sale of subsidised fuel products to owners of private cars on Java.