Low and Controlled Inflation Maintained - Bank Sentral Republik Indonesia
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April 18, 2019
No. 21/18/DKom
 
Low and controlled inflation was maintained in March 2019. The Consumer Price Index (CPI) recorded 0.11% (mtm) inflation in the reporting period to upend the 0.08% (mtm) deflation reported the month earlier. The main driver of inflationary pressures in March 2019 was administered prices (AP), contrasting flatter core inflation and deflation of volatile foods (VF). On an annual basis, therefore, CPI inflation stood at 2.48% (yoy) in the reporting period, down from 2.57% (yoy) the month earlier. Bank Indonesia will continue to consistently sustain price stability and strengthen policy coordination with the Central Government and Regional Administrations to ensure low and stable inflation in pursuance of the target corridor for 2019, namely 3.5%±1%.
 
Inflationary pressures on administered prices (AP) were edged upwards in the reporting period by rising airfares. AP inflation was recorded at 0.08% (mtm) in March 2019, up slightly from 0.06% (mtm) the month earlier. Airfares were the main contributor to higher AP inflation, contrasting the deflationary pressures on fuels and electricity rates. Annually, therefore, administered prices recorded 3.25% (yoy) inflation in the reporting period, falling from 3.38% (yoy) in the previous period.
 
Core inflation slowed from 0.26% (mtm) in February 2019 to 0.06% (mtm) in March 2019. House rentals, gold jewellery and homeworkers’ wages were the key drivers of core inflation in the reporting period. Annually, core inflation stood at 3.03% (yoy), down slightly from 3.06% (yoy) the month earlier. Policy consistency by Bank Indonesia to anchor rational inflation expectations, including measures to maintain the rupiah in line with the currency’s fundamental value, controlled core inflation.
 
Volatile foods (VF) experienced deflationary pressures in March 2019 in line with seasonal trends. Volatile foods recorded 0.02% (mtm) deflation in the reporting period, reversing the 1.30% (mtm) inflation posted the month earlier. VF deflation stemmed from price corrections affecting purebred chicken meat, rice, fresh fish, purebred chicken eggs, tomatoes and carrots. In contrast, the prices of shallots, garlic, papaya and red chillies continued to rise. Annually, VF inflation stood at 0.16% (yoy), down from 0.33% (yoy) the month earlier.
 
Jakarta, 1st April 2019
Communication Department
 
Onny Widjanarko
Executive Director  
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