- Indonesian customers are being hit with more expensive rice prices as concerns over rice supplies intensify. However, cheaper prices for other food commodities such as spices and poultry lead to only a modest increase in the average Indonesian’s food spending budget.
- Despite the only modest increase in overall food prices, stringent interventions to stabilise rice prices remain crucial given its outsized role in dictating Indonesia’s aggregate consumption growth.
- The risk of a more substantial CA deficit stemming from rising rice and oil imports along with the prevailing strong USD environment may limit or delay BI’s signalling for policy easing.
