Indonesia: Inflation stable in October
Consumer prices rose a seasonally-adjusted 0.07% in October over the previous month, swinging from the 0.05% drop logged in September. October’s result was the sharpest increase in prices since June, and was driven largely by higher prices for food, beverages and tobacco.
Inflation was unchanged at 1.4% in October, substantially below Bank Indonesia’s 2.0%–4.0% target range, while annual average inflation fell to 2.2% in October (September: 2.3%). Lastly, core inflation fell to 1.7% from September’s 1.8%.
Below-target inflation in recent months could add to calls for further monetary easing by Bank Indonesia, although FX stability will likely be a key consideration for the Bank when considering whether to embark on any rate cuts. Our panelists see inflation rising back to target next year as the economy recovers.