- Inflation declined to 0.76% YoY (-0.76% MoM) due to a temporary electricity price discount. Absent the discount, inflation would be around 2.25% YoY (0.71% MoM).
- Foodstuffs showed higher-than-expected inflation mainly due to chili, but rice remains the key commodity to watch amid recent government decision to halt imports for 2025.
- Core inflation continues to accelerate due to supply-side factors (gold and processed food) rather than demand-side. In the coming months, it may increase further from Rupiah depreciation.
- A rise in inflation could help lower the real rate, thus supporting private sector spending, as BI’s ability to cut rates remains constrained by global uncertainty.