Headline CPI recorded at +0.6% mom/+4.35% yoy in June22 (+0.4% mom/+3.55% yoy in May22). The resulting number was higher than ours/consensus at roughly 0.45%mom/+4.2%yoy, mostly due to increasing FnB prices at 1.77% mom/8.26% yoy from bad harvest season. In our price tracker, the highest increase comes from chili and red onion prices at +42.8% mom/+100.8% yoy and +16.4% mom/+53.2% yoy.
Meanwhile, Core inflation steadily increasing to 2.63%yoy in Jun22 (+2.58%yoy in May22), suggesting robust household purchasing power.Main contributor of the core inflation was household utilities at +0.53%mom/+4.77% yoy. Gold Jewelry, one of main contribution of Core inflation, contributed a deflation of 0.01% to the CPI due to declining price.
We revise up our inflation expectation to c.4.7% yoy from 3.9% yoy previously for FY22 (1.9% in FY21), as we see stronger demand-pull effect from higher domestic economic activity will take place. Accordingly, we see greater possibility of upward BI rate adjustment to 3.75% (+25bp) in the next meeting. In total, we keep our view of 100bp adjustment to 4.5% for FY22. (Indo Premier Research)




Sumber : IPS