Indonesia skyline

Indonesia Inflation May 2024

Indonesia: Inflation falls to lowest level since February in May

Inflation fell to 2.8% in May, down from April’s 3.0%. May’s reading marked the lowest inflation rate since February. Looking at the details of the release, price pressures for food declined sharply in May, while prices for transport, and housing, water, electricity and household fuels were largely in line with the previous month’s reading.

Accordingly, annual average inflation edged down to 2.9% in May (April: 3.0%). Meanwhile, core inflation rose to 1.9% in May, from April’s 1.8%.

Lastly, consumer prices dropped 0.03% over the previous month in May, swinging from April’s 0.25% increase. May’s result marked the weakest reading since October 2022.

United Overseas Bank analysts Enrico Tanuwidjaja and Agus Santoso commented on the outlook:

“The reason that drive 2024 inflation lower than the last year is the moderation in fuel prices that drives the normalisation of administered price inflation. Meanwhile, we believe the risk of higher food prices will dissipate in the second quarter of this year as production improves, especially for rice and the normalisation of El Nino’s impact on food commodities. As such, we also keep our forecast for BI to be on hold for the rest of the year before cutting its interest rate in 1Q25.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest