Affected by the rise in energy prices, inflation in Indonesia accelerated in May.

The impact of rising energy prices has transmitted to the entire industry chain, causing a slight increase in Indonesia's consumer inflation in May. In May, Indonesia's consumer price index rose by 3.08% year-on-year, compared to 2.42% in April; prices of all consumption items such as food, tobacco, housing, water, electricity, and household fuels have generally increased, driving inflation up. Core inflation rose to 2.59%, compared to 2.44% in the previous month; cumulative inflation from the beginning of the year to May is 1.35%. The Middle East geopolitical conflict has pushed up international energy prices, combined with the weakening Indonesian rupiah, exacerbating inflationary pressures on Southeast Asia's largest economy. Analysts believe that as the rise in import and energy costs gradually transmit to the real economy, inflationary pressure will be further evident in the coming months. Sanjeev S. Mathur, Chief Economist for Southeast Asia and India at ANZ Bank, stated in a recent research report that April is likely the low point of this round of inflation; due to the warming impact of cost transmission pressures, future price increases may edge closer to the upper limit of the Bank of Indonesia's inflation target range of 1.5%-3.5%. At the same time, the pressure on the Indonesian rupiah may make monetary policy decisions for the central bank more difficult. Barclays economist Tan Brian said that if the currency continues to weaken, the Bank of Indonesia may need to consider further tightening monetary policy.