- Inflation rate went up to 1.95% YoY and 1.17% MoM in Apr-25, driven by the statistical removal of the electricity discount program.
- Core inflation excluding gold slowed to 1.68% YoY (1.79% in Mar-25), reflecting weak underlying demand and in line with loan growth slowdown.
- With inflation now normalizing, Indonesia’s real interest rate has declined and the gap with US real rates have declined sharply.
- A near-term rate cut appears unlikely, with room for easing likely opening in H2 if/when the Federal Reserve begins to lower its rates.
