Inflation edges up in Indonesia, but still within target

JAKARTA - Indonesia’s CPI inflation accelerated in November, printing higher than market expectations. ANZ Bank says the print reinforces its view that inflation troughed in Q3 and should be on an upward trajectory going forward.

“Looking ahead, we expect inflation to edge up due to firmer oil prices and electricity tariffs, but still reside comfortably within Bank Indonesia’s (BI) 3-5%  target range,” ANZ says.

“First, any increase in domestic fuel prices will be gradual given that current prices are already higher than implied breakeven prices.

“Second, food inflation would be well managed given that food imports are augmented by significant domestic supply. Third, core inflation would remain benign owing to a mild negative output gap.” www.live.anz.com (ATI).