Indonesia: Inflation remains sticky in February – UOB

Economist at UOB Group Enrico Tanuwidjaja reviews the latest inflation figures in Indonesia.

Key Takeaways

“Indonesia’s headline inflation rate rebounded higher to 5.5% y/y in Feb from 5.3% in Jan, beating consensus forecast slightly. On month basis, it gained by 0.2%, tad faster than Jan’s pace.”

“Significantly higher food prices and relatively elevated level of prices in key consumer baskets such as transportation, utilities, and clothing underpinned the pick-up in headline inflation last month.”

“Today’s inflation data reinforces our 2023 average inflation forecast of 4% (2022: 4.2%). Our view remains for inflation to edge back to be within BI’s target range of 2-4% only in 2H23.”