Inflation in January 2018 Remains Controlled Despite the Increasing Food Price - Bank Sentral Republik Indonesia
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August 11, 2020

No.20/8/DKom

Inflation of Consumer Price Index (CPI) in January 2018 remains controlled within the target range. CPI inflation in January 2018 reaches 0.62% (mtm), decreasing than the previous month’s inflation of 0.71% (mtm). Annually, CPI inflation is recorded 3.25% (yoy) or within the targeted inflation in 2018 of 3.5%±1% (yoy). The controlled inflation is primarily attributable to administered prices whose deflation and core inflation remain controlled amidst the increasing inflation of volatile food.

Core inflation remains controlled and is recorded 0.31% (mtm), increasing compared to the previous month of 0.13% (mtm). Several components affecting the core inflation are gold jewelries, domestic workers’ wages, rice with side dish, and non-foreman workers. Annually, core inflation is recorded 2.69% (yoy), slower than the previous month of 2.95% (yoy). The positive development of core inflation closely relates to the consistent policy adopted by Bank Indonesia to maintain exchange rate stability and direct inflation expectation.

Administered prices undergo deflation in line with normalization of transportation tariff after the holiday season. The deflation is 0.15% (mtm), decreasing than the previous month, which had inflation of 0.91% (mtm). Deflation is primarily attributable to normalization of airfare and train tariff after Christmas and 2018 New Year’s holiday. Annually, components of administered prices record inflation of 5.82% (yoy). Inflation of volatile food increases compared to the previous month, primarily attributable to the price of rice. Inflation of volatile food is recorded 2.58% (mtm), increasing compared to the previous month of 2.46% (mtm). This inflation is higher than that of volatile food in the January of the last four months of 1.63% (mtm). Inflation is primarily attributable to rice, leghorn chicken meat, cayenne pepper, and red chili chili. Annually, inflation of volatile food is recorded 2.62% (yoy). Going forward, inflation is estimated to remain within the 2018 inflation target, i.e. 3.5%±1% (yoy). Policy coordination between the Government and Bank Indonesia to control inflation will be consistently strengthened, particularly to anticipate the risk of increasing volatile food inflation and possible adjustment to prices of several commodities in the administered prices group.

Jakarta, 1 February 2018
Communication Department


Junanto Herdiawan
Deputy Director

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