- Inflation declined to 1.84% YoY in September (-0.12% MoM), due to a combination of foodstuffs deflation, weak consumer demand, and a global deflationary trend driven by oversupply in China.
- Despite the food deflation, there remain live concerns over rice supplies, while impact on rural welfare has been ambiguous and limited.
- Food deflation could continue amid Oct-Nov harvest season, but inflation may pick up again next year from tax increases and a potential rebound of commodity (especially energy) prices. Accordingly, while rate cuts are likely to continue into early 2025, the outlook for further cuts might be murkier.
