Macro Economic

Indonesia Macro Update - INF 03 Jun 2024

Fikri C. Permana 03 June 2024

Monday, 3 June 2024

Monthly Deflation in May ‘24, but Potential Uptick in Jun ‘24

Headline Inflation in May 2024 recorded a deflation of -0.03% MoM or 2.84% YoY, marking the lowest level in the past three months. Furthermore, the S&P Global Indonesia Manufacturing PMI in May 2024 recorded a decrease to 52.1.

Looking ahead, coupled with more favorable weather conditions, we expect the harvest of volatile foods to improve, mitigating various inflationary risks in Jun ‘24. Aside from the potential rise in rice prices, concerns also stem from the adjustment of the highest retail price (HET) and the relaxation of HET for Medium and Premium Rice by 6.49% starting 1 Jun ‘24, as well as the adjustment of HET for Minyakita prices by approximately 9.67% and the extension of HET relaxation until 30 Jun ‘24. Additionally, concerns about inflation transmission due to Rupiah depreciation and the OPEC+ production cuts could potentially lead to adjustments in domestic fuel and electricity prices in the 2H24.


Fikri C Permana - KBVS Research