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Indonesia Inflation June 2023

Indonesia: Inflation declines to lowest level since April 2022 in June

Inflation came in at 3.5% in June, which was down from May’s 4.0%. June’s reading marked the lowest inflation rate since May 2022. Looking at the details of the release, prices for food rose at a softer pace in June, as did prices for transport and clothing.

Annual average inflation was stable at May’s 5.0% in June. Meanwhile, core inflation fell to 2.6% in June, from the previous month’s 2.7%.

Finally, consumer prices rose 0.14% from the previous month in June, after May’s 0.09% increase.

Commenting on the release, Enrico Tanuwidjaja and Agus Santoso, economists at UOB, stated:

“There is still notable potential upside risks to prices due to bad weather especially the adverse impacts on crop yields and consequently higher raw food prices due to “El Nino” (causing longer dry season in Indonesia). […] Additionally, uncertainty in the global financial markets could also render the rupiah exchange rate to higher volatility that may risks of adding some pressures back on imported inflation. All these factors might give rise to some extent of uncertainty on the inflation trajectory in the near future.”

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