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Indonesia Inflation February 2020

Indonesia: Inflation rises in February amid supply disruptions, but remains contained

Consumer prices increased 0.28% month-on-month in February, down from January’s 0.39% rise. February’s reading was driven by higher prices for food, drinks and tobacco.

Inflation was up from 2.7% in January to 3.0% in February, within Bank Indonesia’s target range of 3.0% plus or minus 1.0 percentage point, while core inflation dipped to 2.8% from 2.9%. February’s increase in headline inflation was likely linked to supply chain disruption from the coronavirus and flooding in Jakarta in January. Under-control inflation should allow Bank Indonesia to continue to adopt a dovish stance in a bid to support the economy in the face of a likely coronavirus-induced slowdown.

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