Indonesia inflation rate drops to lowest in almost a decade

Bloomberg

Inflation in Indonesia eased to a near-decade low, boosting odds that the next interest rate move by policy makers in Southeast Asia’s biggest economy could be down.
Consumer prices rose 2.57 percent in February compared to a year earlier, the lowest since November 2009, according to figures released by the statistics office in Jakarta. That was lower than the 2.75 percent median estimate in a Bloomberg survey of 24 economists.
The inflation slowdown gives policy makers further reason to call an end to an aggressive tightening cycle — a total 175 basis points of rate hikes since May.
Bank Indonesia has kept its key rate unchanged at 6 percent in the past three policy meetings. Inflation is now at the lower end of the central bank’s 2.5% to 4.5% target band.
Price pressures have been steadily easing since last year amid subdued fuel and food costs Consumer prices fell 0.08 percent in February from the previous month, compared with a median estimate for a 0.04% decline, led by a drop in food.

The benign inflation environment provides President Joko Widodo with a timely election booster as he bids for a second term. The presidential election is set for April 17 with the cost of living seen as a key voter concern.
Across the region, inflation is moderating. Consumer prices in Malaysia fell for the first time in a decade in January, while the Philippines is also set to report a slowdown next week.