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Inflation figures in Indonesia are seen keeping the 2.0%-4.0% range for the time being, according to Economist Enrico Tanuwidjaja and Haris Handy at UOB Group.

Key Quotes

“Inflation print for April 2020 slowed to 2.67% y/y vis-à-vis March’s 2.96%. National Statistics Bureau reiterated that volatile inflation slowed to 5.04% y/y in April vs. 6.48% in the previous month; indicating weaker demand (amidst large-scale social restrictions to fight the spread of COVID-19), while basic needs supply (volatile inflation determinant) remains sufficient.”

“Going forward, the government sees inflation remaining under control as slower demand due to containment efforts will keep inflation in check. The central government and regional administrations will continue to ensure the availability of food supply. In addition, administered price inflation remains low in order to maintain market price stability. Overall, the government expects inflation to stay within the 2.0% – 4.0% target band. Stable inflation rates will continue to support the overall economic growth momentum for Indonesia.”