Indonesian CPI inflation was lower than expected in May and down on April. Headline CPI rose 4% y/y down from 4.3% the previous month, the top of the target band, and core was 2.7% down from 2.8%. Inflation was driven by food, beverages & cigarettes, with volatile food prices rising 3.3% y/y. Bank Indonesia has kept rates unchanged at 5.75% since February as inflation moderated and the IDR stabilised. It expects headline inflation to be at 3.3% by end-2023, within the target band, thus the tightening cycle seems to have finished.

Indonesia CPI y/y%

Source: MNI - Market News/Refinitiv