Indonesian headline inflation eases again in November, to remain within central bank’s target band
Indonesia’s headline inflation eased for the third consecutive month in November. On a year-on-year basis, the consumer price inflation slowed to 3 percent, the lowest reading since April.
Sequentially, the consumer price inflation rose 0.14 percent in the month, after rising 0.02 percent in October. The rise was driven by food prices, which rose 0.37 percent. However, most categories also saw small price gains, with transport as the exception, falling 0.07 percent.
Core inflation, which excludes volatile food and government-controlled prices, rose 0.11 percent sequentially, which is slightly slower than the 0.17 percent gain seen in October.
“Overall, inflation is likely to stay comfortably within the central bank’s target band (2.5-4.5 percent for 2019, 2.0-4.0 percent for 2020), and on its own will not prevent BI from easing monetary policy. Instead, much will depend on external stability (for more, see here). We have one more 25bp rate cut pencilled in for the current easing cycle, which we expect to materialise by Q1 2020 if not later this month”, said ANZ in a research report.