Indonesia: Inflation returns in March
Latest reading: Consumer prices grew 1.0% year on year in March, swinging from February’s 0.1% decline and hitting a three-month high. The rebound was largely due to a softer drop in housing and utilities costs after the termination of electricity subsidies plus stronger price growth for textiles. That said, inflation came in below market expectations and the lower bound of the Central Bank’s 1.5–3.5% target range as price pressures for food and transport eased from the prior month.
Annual average inflation edged down to 1.7% in March (February: 1.9%). Meanwhile, core inflation was stable, coming in at February’s 2.5% in March.
Lastly, consumer prices increased 1.65% in March over the previous month, contrasting the 0.48% fall seen in February. March’s result was the highest reading since December 2014.
Panelist insight: United Overseas Bank’s Enrico Tanuwidjaja and Vincentius Ming Shen said:
“From an average of 2.3% last year, we continue to expect inflation to average slightly higher at 2.5% this year. Low and stable inflation will continue to give room for BI to continually lower its benchmark rate from its current level to lend support towards risks of slowing economic growth.”