Wahyu Dwi Anggoro
Rising food prices lifted headline inflation this spring. Consumer prices rose 2.8 percent from a year earlier in May, up from a 2.6 percent year-over-year increase in January.
Adverse climate conditions reduced domestic rice harvests and affected food prices more broadly. Headline inflation is expected to average around 3 percent in 2024.
In April, Bank Indonesia (BJ) raised its benchmark interest rate by a quarter percentage point to 6.25 percent, the highest level since 2016. The rate hike came as central banks in advanced economies delayed anticipated policy rate cuts, triggering notable portfolio and other investment outflows, and causing currency pressures in Indonesia and other emerging markets.
The central bank is expected to begin cutting rates next year. (WHY)
