Indonesia Inflation Lowest In 7 Months

(RTTNews) - Indonesia's inflation rate slowed more than expected in March to reach the lowest in seven months, data from the statistics bureau showed on Monday.

The consumer price index increased 4.97 percent year-on-year in March from 5.47 percent in February. Economists had expected inflation to slow to 5.20 percent.

The latest inflation was the lowest since August, when prices rose 4.69 percent year-on-year

Core inflation slowed to 2.94 percent in March from 3.09 percent in February. Economists had forecast a growth of 3.05 percent.

On a monthly basis, consumer prices rose 0.18 percent in March, after a 0.16 percent increase in the previous month. Economists had forecast a gain of 0.29 percent.

Prices for food, beverages and tobacco grew 6.05 percent annually in March and those of housing, water, electricity and household fuels gained 2.74 percent.

Prices for furnishings, household equipment and routine household maintenance surged by 3.72 percent. Prices for health, and clothing and footwear advanced by 2.65 percent and 1.18 percent, respectively.

Meanwhile, data from the statistics bureau also showed that the nation's Wholesale Price Index rose by 5.44 percent year-on-year in March.

On a monthly basis, the WPI increased 0.27 percent and 1.16 percent from twelve months ago.

Since the Bank Indonesia ended its tightening cycle, both headline and core inflation has slowed, giving the central bank ample space to push back on any concerns about adopting a relatively dovish stance, ING economist Nicholas Mapa said.

"With inflation trends showing a downturn, we could eventually see a potential rate cut by the central bank but we would need to the currency stabilize further and growth momentum would need to slow considerably," the economist said.

"The IDR recently slipped below 15,000 and if the currency can maintain this stability, BI could consider a pivot should the Federal Reserve end its own policy tightening cycle in the coming months."