- Inflation recorded another slowdown in October at 1.71% YoY (1.84% YoY in September), ending the five-month deflation streak with a weak 0.08% MoM inflation.
- The main contributors to declining inflation are foodstuffs and transportation, the latter due to lower non-subsidized fuel prices. Core inflation accelerated to 2.21% YoY, mainly because of global price increases in gold, coffee, and CPO.
- We expect inflation to gradually normalize towards 3% YoY next year, because of a higher food inflation outlook and recovering demand, as indicated by recovering base money growth and money velocity.
