No. 26/190/DKom
Consumer Price Index (CPI) inflation was maintained within the 2.5%±1% target corridor in August 2024. Based on inflation data published by BPS-Statistics Indonesia, the CPI index in August 2024 recorded 0.03% (mtm) deflation, thus leading to relatively stable headline inflation at 2.12% (yoy) annually compared with 2.13% (yoy) realised one month earlier. Inflation was maintained within the target range due to monetary policy consistency and close synergy to control inflation between Bank Indonesia and the (central and regional) Government in the National and Regional Government Inflation Control Teams (TPIP and TPID) through strengthening the National Movement for Food Inflation Control (GNPIP) in various regions. Moving forward, Bank Indonesia is confident that inflation will remain manageable within the 2.5%±1% target corridor in 2024 and 2025.
Core inflation remains under control. Core inflation in August 2024 stood at 0.20% (mtm), up slightly from 0.18% (mtm) the month earlier. Realised core inflation in the reporting period was primarily contributed by powdered coffee, gold jewellery and tuition fees in line with the upward international commodity price trend, particularly gold prices, coupled with the start of the new academic year despite anchored inflation expectations to the inflation target. Annually, core inflation in August 2024 was recorded at 2.02% (yoy), increasing from 1.95% (yoy) in the previous period.
Volatile food (VF) maintained a deflationary trend. Volatile food experienced shallower 1.24% (mtm) deflation in August 2024 compared with 1.92% (mtm) the month earlier. VF deflation in the reporting period primarily stemmed from shallots, purebred chicken meat and tomatoes. Lower food prices were supported by higher supply given the ongoing harvesting season for horticultural crops. Annually, VF inflation was recorded at 3.04% (yoy), retreating from 3.63% (yoy) the month earlier. Moving forward, Bank Indonesia expects to manage VF inflation, supported by inflation control synergy with the TPIP and TPID teams through the GNPIP movement in various regions.
Administered prices (AP) experienced inflationary pressures. Administered prices in August 2024 recorded 0.23% (mtm) inflation, accelerating from 0.11% (mtm) the month earlier. The main contributors to AP inflation in the reporting period were fuel and machine-rolled clove cigarettes in response to non-subsidised fuel price adjustments and producers passing through higher excise duties on tobacco products to consumers. Annually, therefore, AP inflation increased to 1.68% (yoy) in August 2024 from 1.47% (yoy) the month earlier.
Jakarta, 2nd September 2024
Communication Department
Erwin Haryono
Assistant Governor
