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Bank Indonesia Expects Low Inflation in February 2019

Bank Indonesia Expects Low Inflation in February 2019

Based on the survey (that only covers the first week of February), the full-month inflation rate of February 2019 is estimated at 0.07 percent month-to-month (m/m). If accurate, then it would push Indonesia’s annual inflation rate to 2.72 percent (y/y), comfortably within Bank Indonesia’s target range of 2.5 – 4.5 percent (y/y) for full-year 2019.

February inflation always tends to be low in Indonesia after the peak in consumption related to the Christmas and New Year celebrations has ended, while food prices also experience relatively few inflationary pressures because the big harvest is coming. However, heavy rainfall (amid the rainy season) is always a challenge that can impact negatively on the distribution channels.