Indonesia: Inflation rose to multi-month highs in September- UOB

Pablo Piovano FXStreet

Economist at UOB Group Enrico Tanuwidjaja and Yari Mayaseti assess the latest inflation figures in Indonesia.

Key Takeaways

“Indonesia’s annual inflation rate stood at 1.60% y/y in September vis-à-vis 1.59% a month earlier, but slightly below market expectations at 1.69% (Reuters). This was the highest inflation rate since May, amidst loosening restrictions in some regions in the country. On a month-on-month basis, Indonesia posted 0.04% deflation in September, following 0.03% inflation in August.”

“Annual core inflation rate slowed slightly to a 5-month low of 1.30% y/y in September (vs. August’s 1.31%) and volatile prices component slowed to 3.51% y/y (vs. August’s 3.80%). Meanwhile, the government-administered prices component rose in September to 0.99% y/y vs. 0.65% in the previous month.”

“Going forward, we expect the headline inflation to gradually recover, and exceed the lower end of the government's 2021 inflation target (2.0% - 4.0%), as the daily COVID-19 cases come under control and the economic activity picks up with the gradual easing of social restriction.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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