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Indonesia's annual inflation expected to ease in May

Staff writer |
Indonesia's consumer price index is projected to increase at a slower pace in May on a yearly basis as unprocessed food prices drop.

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The Indonesian central bank estimated that annual inflation in May stood at 3.3 percent, falling from 3.6 percent in April, Agus Martowardojo, governor of the bank said.

"Therefore, we remain upbeat over achieving this year's inflation target of 3 to 5 percent," Martowardojo added.

However, inflation in May is forecast to go up 0.19 percent on month, compared with minus 0.45 percent in the previous month, he said.

Responding to the inflation's rising trend prior to the Islamic holy month of Ramadhan next month, the central banker said that coordination will be boosted among relevant agencies, as demand for food, clothes and transport costs are commonly on the rise ahead of the month.

The central bank has hinted resumption of the easing policy following a halt in April and May after aggressively cutting its benchmark interest rate by 75 basis points to 6.75 percent in the first three months of the year.

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