Indonesia may see spike in inflation, faster interest rate hikes due to war: analysts

Russia's invasion of Ukraine could not have come at a worse time for Indonesia as South-east Asia's largest economy positions itself for recovery from the Covid-19 pandemic.

Although Indonesia does not have strong trade and investment links with either Ukraine or Russia, analysts say the war will likely push up energy and food prices, as well as fuel a sharp hike in inflation.

This will have a longer term impact on interest rates which could rise faster and much steeper than earlier anticipated.