Macro Economic

Indonesia Macro Update - INF 03 May 2024

Fikri C. Permana 03 May 2024

Friday, 3 May 2024

Inflation Eases Yet Still Weighs on Manufacturing PMI

In Apr ’24, inflation eased to 0.25% mom or 3.00% yoy, driven by the beginning of the harvest season for rice and corn, despite coinciding with the seasonal Ramadhan and Idul Fitri ‘24, coupled with relaxation in reference prices for sales (HAP) and the highest retail prices (HET).

Meanwhile, the S&P Global Indonesia Manufacturing PMI in Apr ’24 decreased to 52.9 (Prev: 54.2) but still continued in the expansionary zone since Sep ’21.

Looking ahead, we expect inflation to remain subdued as the pressure on volatile foods is anticipated to be better contained, especially with better weather. At the same time, we expect the Rupiah to be more stable and tend to appreciate in May ’24 hence mitigate the risk of imported inflation and reduce input price components in the Indonesia Manufacturing PMI. However, the release of economic growth scheduled for May 6, Trade Balance on May 15, and BI RDG on May 22, along with global geopolitical developments, are expected to be indicators in assessing Rupiah developments this month.


Fikri C Permana - KBVS Research Team