Inflation in June 2019 Remains Controlled - Bank Sentral Republik Indonesia
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August 21, 2019

 No.21/48/DKom 

Consumer Price Index (CPI) inflation in June 2019 remains controlled. CPI inflation in June 2019 is recorded 0.55% (mtm) slows down compared to the inflation in the previous month of 0.68% (mtm). With such development, until June 2019, CPI inflation reaches 2.05% (ytd) or annually it is recorded 3.28% (yoy), lower than inflation in the previous month of 3.32% (yoy). Going forward, Bank Indonesia consistently maintains price stability and strengthens policy coordination with the Government at the central and regional levels to ensure inflation remains low and stable predicted to be below the midpoint of inflation target range of 3.5±1% in 2019.

The declining CPI inflation in June 2019 is attributable to the declining inflation of volatile food group in line with the end of the seasonal pattern of Ramadan and Eid al-Fitr. Volatile food group records inflation of 1.70% (mtm), declining compared to the inflation in the previous month of 2.18% (mtm). The declining inflation of volatile food is attributable to the deflation of onions, purebred chicken meat, and purebred chicken eggs. It is attributable to, among others, the declining demand after Ramadan and Eid al-Fitr end. Annually, inflation of volatile food group is recorded 4.91% (yoy), increasing from the inflation in the previous month of 4.08% (yoy).

Administered prices group, which records deflation in line with the positive impacts of airfare adjustment, also contributes to the declining CPI inflation. Administered prices group in June 2019 records deflation of 0.09% (mtm), decreasing compared to the previous month, where inflation stood at 0.48% (mtm). Deflation of administered prices group is attributable to the declining airfare in line with the continued impacts of the applied policy on the declining upper limit of airfare. Annually, administered prices group records inflation of 1.89% (yoy), lower than inflation in the previous month of 3.38% (yoy).

Core inflation remains controlled despite a slight increase compared to the level in the previous month. Core inflation in June 2019 is recorded 0.38% (mtm), increasing compared to the inflation in the previous month of 0.27% (mtm). Main commodities contributing to inflation of the core group are rice and side dish, gold jewelries, preserved fish, noodle, and wages of domestic helpers. Annually, core inflation is recorded 3.25% (yoy), increasing from inflation in the previous month of 3.12% (yoy). The controlled core inflation closely relates to the consistent policy of Bank Indonesia in directing the expected inflation, including maintaining exchange rate fluctuation according to its fundamentals.

Jakarta, 1 July 2019
COMMUNICATION DEPARTMENT

 

Onny Widjanarko
Executive Director

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