HomeForex TradingInflation loses traction in July – UOB

Inflation loses traction in July – UOB


Economist Enrico Tanuwidjaja and Junior Economist Agus Santoso at UOB Group touch upon the most recent launch of inflation figures in Indonesia.

Key Takeaways

Indonesia’s headline inflation in Jul eased to three.1% y/y viz. 3.5% in Jun, underpinned largely by lower in agricultural commodities on account of an enchancment in meals manufacturing and shares. The implementation of agricultural know-how and high-productivity seeds of crimson onion and chili lifted its productiveness and drive deflation of those commodities in Jul.  

Decrease inflation in Jul will be attributed to the decline in many of the subcomponents, besides well being and training. Meals-related sub-component eased to 1.9% y/y viz. 2.9%, marking the most important worth deceleration among the many sub-components, adopted by transportation, and housing. In the meantime, training sub-component recorded greater inflation in keeping with new schoolyear interval. 

Jul’s inflation reaffirms that headline inflation could reasonable to beneath 3% y/y in 3Q2023. Nevertheless, there are nonetheless notable potential upside dangers to costs. First, the affect of local weather change, specifically El Nino that might trigger a lower within the provide of products and rising costs. It has been seen from the rise in meals commodity costs in a number of areas. The opposite issue is the danger of rising world meals costs on account of export restrictions undertaken by a number of foremost meals exporters together with Russia, India, Thailand, and Vietnam. 

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