- August inflation eased to 2.31% YoY with a 0.08% MoM deflation, mainly driven by temporary supply-side factors such as harvests and airfare discounts.
- Core inflation rose slightly (0.06% MoM), but this was largely due to gold and education costs, offering little evidence of stronger demand.
- Annual core inflation slowed to 2.17% YoY, reflecting weaker gold prices and slower credit growth, while ample liquidity points to weak money velocity as the main constraint.
- Although inflation remains manageable, risks of “bad inflation” from rising rice prices and rupiah depreciation could undermine stimulus impact and limit BI’s policy space.
