Indonesia's Inflation Slows More Than Expected in March

INFLATION - JAKARTA. Indonesia's annual inflation cooled to its lowest rate in seven months in March, data from the statistics bureau showed on Monday, as prices rose slower than usual during the beginning of the Muslim fasting month of Ramadan.

March's annual inflation rate was 4.97%, the lowest since August 2022, and down from 5.47% in the previous month. A Reuters poll had expected a March rate of 5.2%.

The annual core inflation rate also came in below market expectation, at 2.94% versus the poll's 3.05%. The April rate was 3.09%.

Read Also: BPS Catat Inflasi Maret 2023 Sebesar 0,18%

Inflation in the Muslim-majority country typically rises during Ramadan, which this year started in late March, and leading up to the Eid al-Fitr celebrations.

The statistics bureau noted that this year's price pressures were below those seen in recent years, excluding the early years of the pandemic.

However, the headline inflation rate remained above the central bank's 2% to 4% target range.

Bank Indonesia (BI) officials have said inflation would likely return to its target range in September on base effects. The government had raised fuel prices in September 2022.

BI raised interest rates by 225 basis points between August to January to guide inflation back to target.