• May CPI up 3.55% YoY, vs. 3.60% in poll
  • May core CPI up 2.58% YoY, vs 2.70% in poll
  • May inflation rate at highest since December 2017

JAKARTA, June 2 (Reuters) – Indonesia’s inflation rate picked up slightly in May on higher food and airfare prices, official data showed on Thursday, broadly in line with expectations. market and within the central bank‘s target range.

The consumer price index rose 3.55% on an annual basis in May, against 3.60% expected in a Reuters poll and an April rate of 3.47%.

May’s inflation rate was the highest since December 2017, but remained within Bank Indonesia’s 2-4% target range for 2022.

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The annual core inflation rate barely changed in May from the previous month, at 2.58% from 2.60% in April. The survey had predicted a rate of 2.70%.

Margo Yuwono, head of Statistics Indonesia, said a three-week ban on palm oil exports in May had depressed cooking oil prices, but pointed out that global food inflation continued. to affect local prices.

“The rise in prices of strategic raw materials in world markets, such as wheat flour, soybeans, contributed significantly to domestic inflation,” he said, noting that prices for chicken and eggs also increased due to the high cost of imported chicken feed.

Last month, the government won parliamentary approval to increase energy subsidies by $24 billion so it could keep some energy prices unchanged. Economists said the move reduced inflationary pressures felt by high global oil prices. Read more

However, some economists have said inflation will continue to rise in Southeast Asia’s biggest economy.

“Going forward, the inflationary pressures we’ve seen in other countries will be more apparent,” said Fakhrul Fulvian, economist at Trimegah Sekuritas.

The central bank last month announced further hikes in the reserve requirement ratio for banks, expecting inflation in 2022 to edge slightly above 4%, before returning to its target range in 2023. Read more

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Reporting by Stefanno Sulaiman, Gayatri Suroyo and Fransiska Nangoy; Editing by Kanupriya Kapoor

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