No. 25/85/DKom
Inflation in March 2023, which coincided with the start of the national religious holidays (HBKN), remainder under control. Based on data published by BPS-Statistics Indonesia, Consumer Price Index (CPI) inflation in March 2023 stood at 0.18% (mtm), relatively unchanged from 0.16% (mtm) the month earlier. Realised CPI inflation in March 2023 was lower than historical trends at the beginning of the Ramadan period. Annually, headline inflation decreased to 4.97% (yoy) in the reporting period from 5.47% (yoy) in February 2023. The latest inflation developments were attributable to the monetary policy response instituted by Bank Indonesia, coupled with close synergy to manage inflation between Bank Indonesia, the central and regional government and other strategic partners in the National and Regional Inflation Control Teams (TPIP and TPID) and the National Movement for Food Inflation Control (GNPIP). Moving forward, Bank Indonesia is confident that core inflation will remain in the 3.0%±1% target corridor in the first semester of 2023, with CPI inflation returning to the 3.0%±1% target in September 2023 after the base effect of subsidised fuel price adjustments implemented last year begin to fade. Furthermore, Bank Indonesia will continue strengthening coordination with the central and regional government to manage inflation, particularly ahead of the national religious holidays (HBKN).
CPI inflation in 2023 was influenced by rising core inflation. Core inflation increased slightly to 0.16% (mtm) from 0.13% (mtm) in the previous period given a gradual bump in demand against lower international commodity prices. The main contributors to core inflation in the reporting period included residential property rentals, domestic helper wages and gold jewellery. Annually, core inflation in March 2023 stood at 2.94% (yoy), down from 3.09% (yoy) in February 2023.
Volatile food (VF) inflation remained under control in March 2023. Volatile food recorded 0.29% (mtm) inflation in the reporting period, relatively stable compared with 0.28% (mtm) in February 2023. The main contributors to volatile food inflation were rice, bird's eye chilis and garlic. Annually, VF inflation decreased to 5.83% (yoy) from 7.62% (yoy) in the previous period.
Inflationary pressures on administered prices (AP) eased in the reporting period. AP inflation was recorded at 0.12% (mtm) in March 2023, down from 0.14% (mtm) in February 2023. Lower monthly AP inflation primarily stemmed from lower regional water supply tariffs (PAM), with further declines nevertheless offset by higher airfares, petrol prices and cigarette prices in line with greater air mobility, an adjustment to non-subsidised fuel prices and a hike in tobacco excise rates. Annually, AP inflation was recorded at 11.56% (yoy), decreasing from 12.24% (yoy) the month earlier.
Jakarta, 3rd. April 2023
Communication Department
Erwin Haryono
Executive Director
Information about Bank Indonesia
Tel. 021-131, Email: bicara@bi.go.id
