Mar 24, 2011
6:00:00 PM
| Last Updated
Due to the subsidy cut delay Indonesia’s parliament approved this week, coupled with sustained rupiah strength, we have revised down our inflation forecast for 2011 from 6.7% to 6.2% y/y. Our forecast assumes the government stands its ground and does not implement fuel subsidy cuts this year, which is likely as long as the Indonesian Crude Price (ICP) remains within the US$90-130 range. The government cut subsidies in late May 2008 after the ICP had spent 12 weeks above US$100, and while March 25 caps the ICP’s ninth consecutive week over US$100, public statements suggest the[...]
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