People at a fruit market in Jakarta. — AFP
JAKARTA: Indonesia's annual inflation rate slowed to its lowest in 24 years to 0.76% in January, official data showed on Monday, down sharply from 1.57% in December and below the lower bound of the central bank's target range for the year.
According to the country's statistics bureau, it was the lowest rate of inflation since January 2000.
The rate came in below analysts' estimate of a 1.88% in a Reuters poll and outside Bank Indonesia's (BI) target range of 1.5% to 3.5%.
On a month-on-month basis, the consumer price index dropped by 0.76% in January, mainly because of a 50% discount in electricity tariffs for some customers and lower airfares, the statistics bureau said.
The government has said electricity discounts will last until February as part of a set of incentives to support people's purchasing power.
The core inflation rate, which strips out government-controlled prices and volatile food prices, rose slightly in January to 2.36% year-on-year compared with December, while it was close to the poll forecast of 2.30%.
BI delivered a surprise cut in rates at its policy review last month, and said inflation was expected to remain contained over 2025 and 2026. It projected a 2.7% annual inflation rate at end-2025, with core inflation at 2.6%.
The central bank is unlikely to resume its cutting cycle this month despite low inflation, however, as it will probably consider rupiah stability amid market turbulence caused by U.S. President Donald Trump's tariffs on Canadian, Mexican and Chinese goods, Bank Danamon economist Hosianna Situmorang said.
The rupiah fell 1%, hitting16,470 per dollar on Monday, its lowest level since June 2024, ahead of the release of inflation data. It has since recovered a touch. - Reuters
