Macroeconomic Forecast Indonesia

Consumer price inflation came in at 4.6% y-o-y in June, down from 5.5% y-o-y in May, while core inflation also hedged down slightly. The slowdown in inflation seen in recent months in Indonesia has prompted us to revise down our end-year and average inflation forecasts once again to 4.5% and 5.4% respectively from 6.0% and 5.8% previously. We also no longer see any rate hikes by Bank Indonesia (BI) and are pencilling in the BI rate to remain at 6.75%.

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