Indonesia: Inflation declines to nearly two-decade low in May
Consumer prices rose a seasonally-adjusted 0.07% in May over the previous month, which was below April’s 0.08% increase. May’s result was mainly driven by higher transport prices more than offsetting lower food prices.
Inflation dropped to 2.2% in May, down from April’s 2.7%. May’s reading represented the weakest inflation rate since June 2000. Annual average inflation fell to 2.8% in May (April: 2.9%). Lastly, core inflation fell to 2.7% from April’s 2.9%.
Our panelists see inflation tracking in the lower part of the Central Bank’s 2.0%—4.0% target range this year. Low inflation, coupled with a weak economy, could provide the rationale for further monetary easing by the Bank.