02 Jun 2021 | News & Feature

Inflation: Global reflation, domestic slowflation?

  • Indonesia’s CPI increased by 1.68% YoY last month, largely driven by Lebaran-related factors.
  • Beyond this however, inflation in Indonesia remains somewhat tepid, despite the surge in the PPI in various other countries. A combination of still-weak domestic demand as well as government price controls appear to be the main culprits.
  • External factors, rather than inflation, remain the key determinants of BI policy going forward.