Thursday July 2, 12:00 AM
Indonesian inflation eases in June: official
Indonesia's annual inflation rate fell more than two percentage points in June, officials said Wednesday, giving the central bank room to lower interest rates to boost the economy.
The Consumer Price Index dropped to 3.65 percent from 6.04 percent in May, officials from the central statistics agency said.
The sharp drop in year-on-year inflation was due in part to a high base effect, as the government raised fuel prices almost 30 percent in May last year to reduce fuel subsidies, boosting the inflation rate in subsequent months.
On-month inflation, however, edged up to 0.11 percent in June from 0.04 percent a month earlier due to an uptick in demand for goods.
On-year core inflation, which excludes volatile food items and government-set prices, eased to 5.56 percent from 6.64 percent in May.
Basic food prices eased 0.04 percent on month, while processed foods rose 0.06 percent.
Transport costs rose 0.04 percent on month, while clothing costs were 0.02 percent higher. Housing and energy costs, and healthcare costs, each rose 0.01 percent.
Bank Indonesia is expected to cut its key rate by at least 25 basis points to 6.75 percent when it meets Friday.
-- Dow Jones Newswires contributed to this story --
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