FOOD, POWER COSTS DRIVE INFLATION IN INDONESIA

JAKARTA - Headline inflation in Indonesia came in well above expectations in February, driven by food, but core inflation was stable. Commenting on the results, ANZ Bank says a key risk moving forward is whether food inflation generates second round effects. “Although food prices are typically more a function of supply rather than demand in emerging markets, significant wage rises across Indonesia may motivate local farmers to become price makers rather than takers,” ANZ says.