Inflation Controlled during Ramadan - Bank Sentral Republik Indonesia
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October 20, 2019

No. 21/44/DKom
Inflation in May 2019, which coincided with the holy fasting month of Ramadan and the approach to Eid-ul-Fitr, remained under control. Consumer Price Index (CPI) inflation increased from 0.44% (mtm) in April 2019 to 0.68% (mtm) in May 2019. In general, inflationary pressures were successfully contained and in line with seasonal trends during Ramadan and Eid-ul-Fitr, averaging 0.77% over the past five years. As of May 2019, therefore, CPI inflation stands at 1.48% (ytd) or 3.32% (yoy) annually. Moving forward, Bank Indonesia will continue to consistently maintain price stability and strengthen policy coordination with the Central and Regional Governments to ensure low and stable inflation is maintained within the target corridor for 2019, namely 3.5%±1%.

CPI inflation was edged up in May 2019 by inflationary pressures on volatile foods during Ramadan and the approach to Eid-ul-Fitr. Volatile foods (VF) recorded 2.18% (mtm) inflation in May 2019, up from 1.59% (mtm) the month earlier. Inflationary pressures on volatile foods stemmed primarily from red chillies, purebred chicken meat, garlic, fresh and preserved fish, purebred chicken eggs, bird’s eye chillies, fruit and vegetables. Annually, VF inflation stood at 4.08% (yoy) in the reporting period, increasing from 2.05% (yoy) the month earlier.

Following seasonal trends, inflationary pressures on administered prices have also intensified. Administered prices (AP) recorded 0.48% (mtm) inflation in May 2019, up from 0.16% (mtm) the month earlier. AP inflation originated from intercity fares, airfares, railway fares, filtered clove cigarette prices and parking charges. Annually, AP inflation increased from 3.17% (yoy) in April 2019 to 3.38% (yoy) in May 2019.

Core inflation remains under control despite increasing slightly on the previous period. Core inflation was recorded at 0.27% (mtm) in May 2019, up from 0.17% (mtm) in April 2019. The main contributors to higher core inflation were rice with a side dish and granulated sugar. Annually, core inflation was recorded at 3.12% (yoy), climbing from 3.05% (yoy) in April 2019. Core inflation was effectively controlled with the help of policy consistency by Bank Indonesia to anchor inflation expectations, while maintaining the rupiah in line with the currency’s fundamental value.

Jakarta, 10th June 2019
COMMUNICATION DEPARTMENT

Onny Widjanarko
Executive Director

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