Indonesia inflation at 1.84% in September, lowest rate since 2021 By Reuters
Written by Stefanno Sulaiman and Fransiska Nangoy
JAKARTA (Reuters) – Indonesia's prices rose to their lowest rate in nearly three years in September as food inflation eased, giving the central bank ample room to ease monetary policy to boost economic growth.
Annual inflation reached 1.84%, Statistics Indonesia said on Tuesday. That was the lowest since November 2021, LSEG data showed.
This figure compares with 2.12% in August and the 2.00% analyst estimate in a Reuters poll. It also remained within the Bank of Indonesia's inflation target of 1.5% to 3.5%.
Food prices were the main contributor to inflation figures but their growth rate slowed to 2.57% compared to 3.39% in August.
Core inflation, which excludes variable food prices and government-administered prices, was 2.09% compared to 2.03% in the poll.
Abundant food supply and the government's policy to maintain prices of high-quality goods will provide “a lot of room for BI to loosen its fiscal stance,” said Maybank Indonesia economist Myrdal Gunarto.
BI is likely to lower its policy interest rate to 5.25% by the end of the year, Myrdal said, instead of 5.75% as he had previously forecast.
BI last month cut the rate for the first time in three years to strengthen growth amid slow inflation – by 25 points to 6.00% – hours before a 50-point cut in the US.
