JAKARTA: Indonesia’s inflation rate eased to 2.57% in January, roughly in line with market forecasts and near the midpoint of the central bank’s target range, data from the statistics bureau showed on Thursday.

Economists surveyed by Reuters had expected a January annual rate of 2.55%, cooling from December’s 2.61%.

Bank Indonesia (BI) targets inflation within a range of 1.5% to 3.5% this year.

The core inflation rate, which strips out government-controlled prices and volatile food prices, also cooled to 1.68% in January, from 1.80% in the previous month.

The poll had expected a rate of 1.76%.

The statistics bureau said it has changed the base year for its calculation of the consumer price index to 2022, compared with its previous base year of 2018.

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Inflation in Southeast Asia’s largest economy has stayed within the central bank’s target range since the middle of 2023, helped by BI’s interest rate hiking cycle of 250 basis points between August 2022 and October 2023.

Despite the low headline figure, food prices have risen in the country amid supply disruptions due to drier than usual weather. Volatile food inflation accelerated to 7.22% in January, from December’s 6.73%, reflecting rising prices of rice, garlic, tomato, chili and chicken.

BI Governor Perry Warjiyo has said he saw room for the central bank to begin cutting interest rates in the second half of 2024, though other officials have also noted upside risks to BI’s inflation forecast due to pressure on food prices.