Low and Controlled Inflation Maintained in March 2020 - Bank Sentral Republik Indonesia
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August 11, 2020

No. 22/ 27 /DKom  

Consumer price index (CPI) inflation remained low and under control in March 2020. CPI inflation was recorded at 0.10% (mtm) in March 2020, down from 0.28% (mtm) one month earlier. The main contributors to lower headline inflation in the reporting period were deflationary pressures on volatile foods and administered prices, coupled with controlled core inflation, excluding the gold price. Annually, therefore, CPI inflation in March 2020 stood at 2.96% (yoy), decreasing slightly from 2.98% (yoy) in the previous month. Moving forward, Bank Indonesia will consistently maintain price stability and strengthen policy coordination with the central government and regional administrations to maintain low and stable inflation within the target corridor for 2020 at 3.0%±1%.

In general, core inflation remained under control despite increasing slightly on a monthly basis. Core inflation was recorded at 0.29% (mtm), up from 0.14% (mtm) in February 2020. Higher prices of gold jewellery in line with the rising international gold price edged up core inflation in the reporting period. Annually, core inflation stood at 2.87% (yoy), increasing from 2.76% (yoy) in February 2020. Core inflation remains under control in line with policy consistency by Bank Indonesia to anchor rational inflation expectations.

Price corrections affecting several food commodities triggered deflationary pressures on volatile foods. The prices of various chili varieties, fresh fish, garlic and cooking oil experienced corrections in the reporting period, leading to VF deflation of 0.38% (mtm) compared with 1.27% (mtm) inflation recorded in February 2020. Annually, VF inflation was recorded at 6.48% (yoy), down from 6.68% (yoy) one month earlier.

Administered prices experienced another period of deflation. AP deflation deepened in March 2020 to 0.19% (mtm) from 0.11% (mtm) in February 2020, precipitated by ongoing corrections to airfares. In contrast, however, inflationary pressures intensified on various types of cigarette in line with the government’s move to gradually raise the excise tax on tobacco products. Annually, therefore, administered prices recorded 0.16% (yoy) inflation, down from 0.54% (yoy) in February 2020.

Jakarta, 1st April 2020
Onny Widjanarko
Executive Director




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