- Indonesia’s inflation further slowed down to 2.13% in July (-0.18% MoM), with foodstuffs deflation led by shallots, red chili, tomato, and chicken. However, food inflation remains a risk, with rice still being the key player, although milder from previous expectation.
- Core inflation saw an increase fueled by a recent gold rally and back-to-school season, while domestic demand growth appears to be slower.
- Weaker domestic demand in China and the return to oversupply-and-dumping dynamic have further pulled down inflation.
- Low inflation and expectation on Fed rate cut have make BI’s calculus much simpler, but BI remained on cautious stance, amid concern on Rupiah’s depreciation.
