Headline inflation rose 5.71% year-on-year, much slower than the near-6% notched in September and expected by analysts for this month. The core number, which strips out volatile and subsidized items, stood at 3.31%, also below the 3.4% market consensus. Food inflation retreated to 7.04% versus 8.69% in September.

On a monthly basis, Southeast Asia’s largest economy saw a deflation of 0.11%. While the rollback in fuel subsidies pushed up transport inflation to 0.35% month-on-month, this was more than offset by the 1% deflation in the food, beverage and tobacco category.

The latest data affirms Bank Indonesia’s aggressive monetary tightening, which policymakers say is necessary to anchor inflation expectations that have started “overshooting” on-ground realities.

The central bank expects headline inflation to peak at 6.3% by the year-end. The core gauge is seen accelerating to 4.3% before returning within the 2%-4% target by the first half of 2023.