Data from Indonesia’s statistics bureau shows that annual inflation eased to 4-percent in May, matching the upper end of Bank Indonesia’s (BI) target range earlier than expected, according to reporting from Vietnam Plus.
Indonesia’s inflation had been above BI’s 2-percent to 4-percent target range since June 2022 due to pressures from rising global food and energy prices.
Peaking at nearly 6-percent in September, inflation has since eased gradually after BI hiked interest rates by a total of 225-basis points, say Vietnam Plus.
Earlier, a poll of analysts had expected May inflation at 4.22-percent. In April, the rate was 4.33-percent.
The core inflation rate, which strips out government-controlled and volatile food prices, eased to 2.66-percent in May from 2.83-percent a month before. The poll had expected 2.80-percent, according to Vietnam Plus.
At BI’s last policy meeting, it had expected headline inflation to ease to within its target in the third quarter, with core inflation seen staying within the same target band throughout the year.
Pudji Ismartini, deputy head of the statistics bureau, attributed slowing inflation to declining airfares after the Eid al-Fitr festivities, say Vietnam Plus.
DBS Bank economist Radhika Rao acknowledged that Indonesia’s inflation continues to surprise on the downside as seasonal festive effects fade and administrative measures help to calm food cost.
Source: Vietnam Plus