ASEAN KEY DESTINATIONS
Easing food prices to slow inflation
The Central Statistics Agency (BPS) said last month that inflation slowed to an annualized 6.16 percent, the lowest in sixth months, after coming in at 6.65 percent in March.
Wednesday’s announcement of May’s inflation and trade statistics by the BPS is expected to bring further good news.
“Inflation may slow further to 5.8 percent compared to last year,” Purbaya Yudhi Sadewa, an economist at Danareksa Research Institute, said on Monday.
He said prices for food such as chilies, onions, meat and eggs were lower on average this month, helping ease the rate of inflation.
“Rice prices started picking up last week, but the average price is still lower compared to the average price the month before,” Purbaya said.
Food and commodity prices had soared in recent months, pushing the rate of inflation higher, but that pressure eased as Indonesia’s rice harvest began replenishing the country’s stocks.
Helmi Arman, an economist at Bank Danamon, said he expected a stable inflation figure of 5.88 percent in May.
“Consumer inflation expectations were still high as of April, which may have led to continued adjustments in informal sector wages such as for housemaids and construction workers,” Helmi said.
He warned that the core consumer price index could increase for May but expected controllable year-on-year figures.
“Inflation is likely to have eased further in May, again on the back of stabilizing food prices, with rice prices falling for the fourth consecutive month since peaking in December to January,” said Gundy Cahyadi, an economist at OCBC Bank, which forecast year-on-year inflation for May at 6.1 percent.
“The underlying support for domestic inflation, however, is likely to remain supported amid the strong domestic demand prevailing in the economy,” he added, projecting May core inflation at 4.8 percent, up from April’s core inflation of 4.62 percent.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below