Economist at UOB Group Enrico Tanuwidjaja and Haris Handy assess the latest inflation figures in Indonesia.
“Indonesia’s annual inflation rate accelerated by 1.68% y/y in May 2021 vis-a-vis 1.42% in the previous month, according to the data released by National Statistics Bureau. This also marked the highest annual inflation since December 2020, despite still below the central bank’s target range of 2.0% – 4.0%.”
“Going forward, we expect the headline inflation to gradually recover, and exceed the lower end of the government’s 2021 inflation target (2.0% – 4.0%), in the light of the ongoing vaccination program, accommodative monetary policy, and fiscal stimulus disbursement, which in turn will result in higher consumer confidence and demand; especially in the 2H21.”
