Inflation falls in October, but core rate at 15-month high – Economy

Indonesia’s annual headline inflation rate fell in line with expectations, but the core inflation rate accelerated to the highest in a year, official data showed on Friday.

October’s headline inflation rate was 1.71 percent, down from 1.84 percent in September and close to the median forecast of 1.68 percent by analysts in a Reuters poll. The headline rate in October was the lowest since October 2021.

However, the core inflation rate, which excludes government-controlled prices and volatile food prices, rose to 2.21 percent, the highest since July 2023, from 2.09 percent the previous month.

Analysts predicted that the core inflation rate would remain constant.

The main rate was close to the lower end of Bank Indonesia’s (BI) target range of 1.5 percent and 3.5 percent.

The central bank does not have a core inflation target, but its officials often say its interest rate policy is also aimed at managing core inflation, which better reflects demand pressures.

BI cut interest rates in September and its governor said it may ease monetary policy further given that inflation will remain low until 2025, but the timing of the next rate cut could depend on global market conditions.

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