Indonesia: Inflation bounces in July – UOB

Economist at UOB Group Enrico Tanuwidjaja and Haris Handy review the latest inflation figures in Indonesia.

Key Quotes

“Indonesia’s annual inflation rate picked up to 1.52% y/y in July 2021 vis-à-vis 1.33% in the previous month amidst tighter mobility curbs that were implemented during the month as the country saw a spike in COVID-19 infections of the delta variant. This result is above market expectations at 1.45%, but remains below the central bank’s target range of 2.0% - 4.0%. On a month-on-month basis, Indonesia experienced inflation of 0.08% vs. June’s 0.16% deflation.”

“The government-administered prices and volatile prices component rose in July to 0.61% y/y (vs. June’s 0.49%) and 2.97% y/y (vs. June’s 1.60%), respectively. However, the annual core inflation rate, which excludes government-controlled and volatile prices, slowed to 1.40% y/y in July from June's reading of 1.49%.”

“Out of 11 items in the inflation basket by expenditure, July 2021 inflation was mainly attributable to higher food-beverage-and-tobacco and transportation prices.”