No. 26/114/DKom
Consumer Price Index (CPI) inflation in May 2024 was maintained within the 2.5%±1% target corridor. Based on inflation data published by BPS-Statistics Indonesia, the CPI Index in May 2024 recorded 0.03% (mtm) deflation. Annually, therefore, headline inflation fell to 2.84% (yoy) in the reporting period from 3.00% (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 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 in the 2.5%±1% target corridor in 2024.
Core inflation remains under control. Core inflation in May 2024 stood at 0.17% (mtm), down from 0.29% (mtm) the month earlier. Lower core inflation in the reporting period was attributable to the normalisation of demand after the recent Eid-ul-Fitr national religious holiday (HBKN) despite the upward trend observed in international commodity prices, particularly gold. The main contributors to core inflation in May 2024 included gold jewellery, granulated sugar, greasy pastry and residential leases. Annually, therefore, core inflation in May 2024 was recorded at 1.93% (yoy), up from 1.82% (yoy) the month earlier.
Volatile food (VF) recorded deflation. Volatile food experienced deeper 0.69% (mtm) deflation in May 2024 compared with 0.31% (mtm) deflation in the previous period. The main contributors to VF deflation in May 2024 were rice, purebred chicken meat, and bird's eye chili. Price corrections to food commodities primarily stemmed from the ongoing harvesting season, coupled with lower animal feed prices, which edged down purebred chicken meat prices. Annually, therefore, VF inflation decreased to 8.14% (yoy) in May 2024 from 9.63% (mtm) in April 2024. 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 deflation. Administered prices in May 2024 experienced 0.13% (mtm) deflation after recording a 0.62% (mtm) inflation the month earlier. The main contributors to AP deflation in the reporting period were lower intercity transport fares, airfares and train fares as ticket prices normalised after the recent Eid-ul-Fitr national religious holiday (HBKN). Notwithstanding, further decline was negated by inflation of machine rolled clove cigarettes as produces passed through higher excise duties on tobacco products to consumers. Annually, therefore, AP inflation decreased to 1.52% (yoy) in May 2024 from 1.54% (yoy) the month earlier.
Jakarta, 3rd June 2024
Communication Department
Erwin Haryono
Assistant Governor
