Indonesia: Inflation dips further in March
Consumer prices increased 0.11% in March from the previous month, contrasting February’s 0.08% decline. March’s print was driven by higher prices for clothing and health.
Inflation dipped from 2.6% in February to 2.5% in March, marking a fresh multi-year low and falling to the bottom end of Bank Indonesia’s target range of 3.5% plus or minus 1.0 percentage point. Core inflation dipped marginally from 3.1% to 3.0%.
Looking ahead, inflation is set to remain subdued thanks to ongoing government measures to control prices, including through subsidies and efforts to improve the food supply. Moreover, the current account deficit is set to narrow from 2018, which should lessen pressure on the rupiah.