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Indonesia Inflation March 2023

Indonesia: Inflation falls to lowest level since August 2022 in March

Inflation came in at 5.0% in March, down from February’s 5.5%. March’s figure marked the weakest inflation rate since August 2022. Looking at the details of the release, price pressures for housing, water, electricity and household fuels eased, while transport prices rose at a quicker pace in March compared to the previous month.

The trend pointed up slightly, with annual average inflation coming in at 4.9% in March (February: 4.8%). Meanwhile, core inflation edged down to 2.9% in March, from the previous month’s 3.1%.

Lastly, consumer prices increased 0.18% over the previous month in March, picking up from February’s 0.16% rise.

Commenting on the outlook, Enrico Tanuwidjaja, economist at UOB, stated:

“Inflationary pressure [may] ease towards BI’s target sooner than expected. Stronger rupiah […] would also render a more entrenched and manageable imported inflation. […] Nevertheless, there is still potential upside risks to prices due to bad weather and distribution disruptions that cause food commodity prices to rise higher than previously estimated. Additionally, uncertainty in the global financial markets could also subject the rupiah exchange rate to higher volatility that may risks of adding some pressures on imported inflation. […] All these factors might still render some extent of uncertainty on the inflation trajectory in the near future.”

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