02 May 2024 | News & Feature

CPI - Out of the woods for now

  • Indonesia inflation slightly declined to 3.00% YoY (0.25% MoM) in April 2024, with transportation contributing the most to the monthly increase.
  • Food prices have begun to normalize thanks to the harvest season, but there are long-term concerns over food security due to heatwaves across Southeast Asia.
  • Increase in global oil prices should have a limited pass-through to overall inflation if price adjustments only occur for non-subsidized fuels.
  • Core inflation experienced a moderate increase amid the large amounts of cash in circulation and the more limited impact from global disinflation.
  • Any further increases in the BI rate will likely be driven by concerns over domestic liquidity and Rupiah, rather than inflation, considering the mixed outlook from the last FOMC meeting.