In accordance with LPEM FEB UI's expectations, there was deflation (mtm) in February which was recorded at 0.08%, although year-on-year the decline in general inflation was quite sharp, exceeding expectations, which was recorded at 2,57%. For comparison, monthly inflation in February 2018 and 2017 was recorded at 0,17% (mtm) and 0,23%, respectively. The continued decline in prices of volatile goods, especially foodstuffs, which exceeded similar trends in February in previous years, led to deflation in February. We are of the opinion that the combination of the declining long-term trend in inflation and a relatively good harvest season this year will mean that general inflation (mtm) will be recorded at low levels and will not move much from the range of 2.6-2.8% (yoy) in March 2019. On the other hand Additionally, the reversal of wholesale trade price trends, strengthening economic growth, and Bank Indonesia's signal to loosen monetary policy in the future mean we maintain our inflation outlook in the range of 3.4-3.6% at the end of 2019.

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