=DJ DATA SNAP: Indonesia July CPI +2.71% On Year; +0.45% On Month Indonesia's annual inflation eased to 2.71% in July from 3.65% in June, the official Central Statistics Agency said Monday, which will likely prompt the central bank to cut its policy rate by another 25 basis points later this week.
The statistics agency said that compared with a month earlier, inflation rose to 0.45% from 0.11% in June, mostly due to increases in basic food prices and education costs. Basic food prices rose by 1.1%, while education costs were up by 1.21% in July. The agency said that core inflation in July, however, slowed to 4.91% from 5.56% in June. The median forecast of 10 regional economists polled recently by Dow Jones Newswires was for annual inflation to fall to 2.66%, due to higher-base prices resulting from the government's move to increase fuel prices in May last year, which led to higher prices overall in subsequent months. Nine economists who gave month-on-month inflation forecasts expect the rate to be 0.38%. Bank Indonesia is expected to cut its overnight policy rate to 6.5% when it meets Wednesday, the 10 economists predicted. The majority of them expect the rate will remain at that level for the rest of the year as recovering commodity and energy prices globally may stoke inflation again in the near term.
