Indonesia's inflation is expected to trend higher in the near term, Kenanga economists say in a note. Rising food and transport costs, along with persistent rupiah weakness, are likely to keep price pressures elevated, although inflation is expected to remain within Bank Indonesia's target range of 1.5%-3.5%, they say. Kenanga maintains its 2026 Indonesia inflation forecast at 3.1%, up from 1.9% in 2025, but see risks skewed to the upside if the currency remains under pressure. Bank Indonesia is expected to maintain a defensive policy stance, with the possibility of another 25bp rate increase to support the rupiah and contain inflation, it adds. (yingxian.wong@wsj.com)
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Indonesia's Inflation Could Trend Higher in Near Term — Market Talk
Indonesia's inflation is expected to trend higher in the near term, Kenanga economists say in a note. Rising food and transport costs, along with persistent rupiah weakness, are likely to keep price pressures elevated, although inflation is expected to remain within Bank Indonesia's target range of…