No. 26/156/DKom
Consumer Price Index (CPI) inflation in July 2024 was maintained within the 2.5%±1% target corridor. Based on inflation data published by BPS-Statistics Indonesia, the CPI index in July 2024 recorded 0.18% (mtm) deflation, thus bringing headline inflation down to 2.13% (yoy) annually in the reporting period from 2.51% (yoy) the 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 July 2024 stood at 0.18% (mtm), up from 0.10% (mtm) the month earlier. Realised core inflation in the reporting period was primarily contributed by gold jewellery, powdered coffee 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 July 2024 was recorded at 1.95% (yoy), increasing from 1.90% (yoy) in the previous period.
Volatile food (VF) maintained a deflationary trend. Volatile food experienced deeper 1.92% (mtm) deflation in July 2024 compared with 0.98% (mtm) the month earlier. VF deflation in the reporting period primarily stemmed from shallots, red chillies and tomatoes. Lower food prices were supported by higher supply given the ongoing harvesting season for horticultural crops. Annually, VF inflation was recorded at 3.63% (yoy), down from 5.96% (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) recorded inflation. Administered prices in July 2024 experienced 0.11% (mtm) inflation, relatively stable compared with 0.12% (mtm) deflation the month earlier. The main contributors to AP inflation in the reporting period were machine-rolled and hand-rolled clove cigarettes in response to producers passing through higher excise duties on tobacco products to consumers. Annually, therefore, AP inflation decreased to 1.47 % (yoy) in July 2024 from 1.68% (yoy) the month earlier.
Jakarta, 1st August 2024
Communication Department
Erwin Haryono
Assistant Governor
