The continued decline in volatile goods prices in March caused general inflation to fall slightly below Bank Indonesia's lower limit to 2,48% (yoy). The decline in inflation last month was largely contributed by the decline in energy and food prices (see Table 1) during the harvest season. Even though general inflation continues to fall, we see that inflation fundamentals are still relatively stable and good, as can be seen from core inflation which remains above the 3% level. Improving wholesale trade prices, relatively stable political conditions ahead of the elections, and Bank Indonesia's signal to loosen monetary policy in 2019 mean we maintain our inflation outlook in the range of 3.4-3.6% at the end of 2019.

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