Indonesia: Inflation comes in at highest level since April 2020 in March
Consumer prices increased 0.66% over the previous month in March, swinging from February’s 0.02% drop and marking the highest reading since December 2017. March’s figure was driven by quicker price growth for food and non-alcoholic beverages.
Inflation increased to 2.6% in March, above February’s 2.1%. March’s figure marked the highest inflation rate in nearly two years. Annual average inflation edged up to 1.8% in March (February: 1.7%). Lastly, core inflation rose to 2.4% in March, from the previous month’s 2.0%.
Commenting on the outlook, Nicolas Mapa, senior economist at ING, commented:
“We believe both headline and core inflation will heat up considerably in the near term and we can expect the central bank to be on alert […] A rate hike may do little to stem inflationary pressures but it should work to anchor inflation expectations and shore up the Indonesian rupiah ahead of the next Federal Reserve policy meeting.”