Monday, August 7, 2017

Inflation Holds Up In July

Economic Research
7 August 2017

Economic Update

Headline inflation held up at 2.8% YoY in July, from +2.7% in June, on the back of faster increases in the costs of recreation & culture, transport, restaurants and education, but partly mitigated by a slower rise in the heavily-weighted price of food. While inflation rate eased somewhat of late, it still stays elevated. For the full year, we forecast inflation to rise to 3% in 2017, from +1.8% in 2016. The higher inflation in 2017 is premised on:
1. Higher domestic fuel prices compared to a year earlier;
2. An upward adjustment in electricity rates;
3. Resilient domestic demand;
4. The tax policy reform programme.

Economist:  Rizki Fajar  | +6221 2970 7065

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