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Indonesia Inflation June 2021

Indonesia: Inflation recedes in June

Consumer prices dipped a seasonally-adjusted 0.16% from the previous month in June, swinging from the 0.32% increase recorded in May. June’s reading marked the first decrease in prices in nine months.

Inflation came in at 1.3% in June, down from May’s 1.7%. June’s reading came amid renewed lockdown measures and marking the lowest inflation rate since May 2000. Annual average inflation remained stable at May’s 1.5% in June, while core inflation rose to 1.5% in June, from the previous month’s 1.4%.

Commenting on the short-term outlook for inflation Nicholas Mapa, senior economist at ING, stated:

“Inflation has stayed below the central bank’s 2-4% inflation target for more than a year and we expect price pressure to stay soft in the coming months with President Jokowi considering tighter lockdown measures to deal with a recent surge in Covid-19 infections. The extended partial lockdowns and the prospect of even tighter measures will only sap more from economic momentum, resulting in subdued inflation in the second half of the year.”

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