CPI Deflation recorded in September 2019 on Lower Food Prices - Bank Sentral Republik Indonesia
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July 11, 2020
No. 21/70/DKom
The monthly Consumer Price Index (CPI) experienced deflation in September 2019. CPI deflation was recorded at 0.27% (mtm), reversing the 0.12% (mtm) inflation in the previous period. CPI deflation in the reporting period primarily stemmed from volatile food (VF) deflation and lower core inflation despite a moderate build-up of inflationary pressures on administered prices. As of September 2019, therefore, CPI inflation in 2019 stood at 2.20% (ytd), or 3.39% (yoy) annually, down from 3.49% (yoy) in August 2019. Moving forward, Bank Indonesia will consistently maintain price stability and strengthen policy coordination with the central and local governments in order to control inflation. Bank Indonesia projects inflation in 2019 below the midpoint of the 3.5±1% target, while maintaining inflation within the target corridor for 2020 at 3.0±1%.
Lower core inflation has helped to control CPI inflation within the target range.  Core inflation was recorded at 0.29% (mtm) in the reporting period, falling from 0.43% (mtm) the month earlier. Lower core inflation stemmed from the main contributors, such as gold jewellery, education services and house rentals. Annually, core inflation stood at 3.32% (yoy), relatively stable on the 3.30% (yoy) recorded in the previous period. Core inflation was controlled due to anchored inflation expectations as a result of policy consistency by Bank Indonesia to maintain price stability and manage aggregate demand, as well as rupiah exchange rates moving in line with the currency's fundamental value and the minimal impact of global prices.
Volatile foods experienced another period of deflation, deepening to 2.26% (mtm) from 0.25% (mtm) the month earlier.  VF deflation was primarily attributable to lower prices of various chili varieties, garlic and shallots, purebred chicken meat, purebred chicken eggs, fresh fish and vegetables. Meanwhile, rice experienced controlled inflation. Annually, VF inflation was recorded at 5.49% (yoy), down from 5.96% (yoy) in the previous period.
Administered prices experienced mild inflationary pressures.  In September 2019, AP inflation stood at 0.01% (mtm), after experiencing 0.40% (mtm) deflation the month earlier. The main contributors to AP inflation were cigarette prices, while airfares recorded another period of deflation as seasonal demand continues to fade. Annually, administered prices recorded 1.88% (yoy) inflation compared to 1.87% (yoy) in the previous period.
Jakarta, 1st October 2019
Onny Widjanarko
Executive Director 


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