Daily Times

Indonesia’s annual inflation rate is expected to have eased in May to the slowest pace in almost seven years, a Reuters poll showed. The median forecast in a poll of 16 analysts is for the consumer price index to rise 3.29 percent on-year, the weakest pace since December 2009, and down from 3.60 percent in April. Analysts expected consumer prices to have increased 0.18 percent on a monthly basis in May. On-year core inflation, which strips out administered and volatile food prices, was seen steady at 3.43 percent in May from 3.41 percent in April. DBS Group said in a note on Monday the likely moderation in on-year inflation was a result of low energy prices and a relatively stronger rupiah. The poll results are broadly in line with Bank Indonesia’s (BI) May inflation expectations, which was 3.3 percent for the annual rate and 0.19 percent for the monthly rate. The central bank said the increase in chicken prices is the main reason for the likely rise in monthly inflation. Governor Agus Martowardojo last week said the bank may ease its monetary policy again at its next meeting on June 15-16, but that such a move would depend on stable economic conditions.