Jakarta: Indonesia’s consumer price index (CPI) fell for the first time in more than two decades, driven by subsidized electricity tariffs and lower prices of some basic food items which could give room for the central bank to weigh a rate cut if the rupiah stabilizes. Indonesia’s CPI fell 0.09% year-on-year in February, marking the first annual deflation since March 2000. The decline was primarily driven by the government’s decision to subsidize electricity prices in January and February as well as by lower prices of food products such as rice.
According to Qatar News Agency, the CPI drop marked the second consecutive month in which inflation fell below Bank Indonesia’s target range of 1.5% to 3.5%. However, core inflation, which excludes volatile food and government-controlled prices, rose slightly to 2.48% in February.