Indonesia’s annual inflation rate rose to 3.55% in May 2022 from 3.47% in April, compared with market consensus of 3.6%. This was the highest print since December 2017, with food prices rising 5.62%, the most since March 2020, as consumption strengthened sharply during the Eid-ul Fitr celebration. Additional upward pressures also came from cost of housing & utilities (2.12% vs 2.05% in April), furnishings (4.39% vs 4.23%), food services & restaurant (3.57% vs 3.47%), transport (4.77% vs 4.84%), education (1.71% vs 1.71%) and clothing (1.10% vs 1.83%).
Meantime, cost of information, communication & financial fell further (-0.20% vs -0.22%). The headline index was within the central bank’s target range of 2 to 4% for the fifth straight month. Annual core inflation rate was at 2.58%, compared with April’s 23-month high of 2.60% and consensus of 2.7%. On a monthly basis, consumer prices were up 0.4% in May, the least in 3 months and compared with forecasts of a 0.41% gain.