Indonesia’s inflation brought under control faster than expected

A man transports vegetables on his motorbike in Jakarta. (Photo: AFP)

Jakarta (VNA) -  Indonesia's annual inflation rate eased to 4% in May, matching the upper end of the central bank's (BI) target range earlier than expected, data from the country's statistics bureau has showed.

Inflation in Southeast Asia's largest economy had been above the BI’s 2% to 4% target range since June 2022 due to pressures from rising global food and energy prices.

Peaking nearly 6% in September, inflation has since eased gradually after the central bank hiked interest rates by a total of 225 basis points.

Earlier, a poll of analysts had expected May inflation at 4.22%. In April, the rate was 4.33%.

The core inflation rate, which strips out government-controlled and volatile food prices, eased to 2.66% in May from 2.83% a month before. The poll had expected 2.80%.

At BI's last policy meeting, it had expected headline inflation to ease to within its target in the third quarter, with core inflation seen staying within the same target band throughout the year.

Pudji Ismartini, deputy head of the statistics bureau, attributed slowing inflation to declining airfares after the Eid al-Fitr festivities.

DBS Bank economist Radhika Rao acknowledged that Indonesia's inflation continues to surprise on the downside as seasonal festive effects fade and administrative measures help to calm food cost./.