Low Inflation Maintained in June 2020 - Bank Sentral Republik Indonesia
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August 11, 2020

No.22/48/DKom

Consumer Price Index (CPI) inflation remained low in June 2020. Low CPI inflation was recorded at 0.18% (mtm) in June 2020 despite increasing from 0.07% (mtm) one month earlier. June inflation was influenced by lower core inflation and administered prices, while inflationary pressures on volatile foods intensified. Annually, CPI inflation in June 2020 stood at 1.96% (yoy), down from 2.19% (yoy) in the previous period. Bank Indonesia will continue to consistently maintain price stability and strengthen policy coordination with the central and local governments to maintain low and controlled inflation within the 3.0%±1% target corridor in 2020.

By component, low headline inflation in June 2020 was impacted by a decrease recorded in core inflation from 0.06% (mtm) to 0.02% (mtm) in the reporting period. This was accounted for by deflationary pressures on onions, granulated sugar and gold jewellery despite a build-up of inflationary pressures on rice with a side dish. Annually, core inflation stood at 2.26% (yoy), decreasing from 2.65% (yoy) in May 2020. Lower core information was associated with compressed domestic demand due to the COVID-19 pandemic, coupled with policy consistency by Bank Indonesia to anchor inflation expectations, low international commodity prices and maintained exchange rate stability.

Administered prices (AP) recorded 0.22% (mtm) inflation in June 2020, down from 0.67% (mtm) the month earlier. The main contributor to AP inflation in the reporting period was transportation fares after the government began relaxing operating restrictions on public transportation at the beginning of June 2020. Annually, AP inflation increased from 0.28% (yoy) in May 2020 to 0.52% (yoy) in June 2020.

After recording 0.50% (mtm) deflation in May 2020, volatile foods (VF) posted 0.77% (yoy) inflation in June 2020. VF inflation was primarily edged upwards by purebred chicken meat, purebred chicken eggs and coconuts, contrasting the deflationary pressures experienced by various chili varieties, garlic and cooking oil in line with adequate supply during the harvesting season combined with uninterrupted distribution despite large-scale social restrictions in various regions and low international commodity prices. Annually, volatile foods recorded 2.32% (yoy) inflation in June 2020, down from 2.52% (yoy) one month earlier. 

Head of Communication Department
Onny Widjanarko
Executive Director

Information on Bank Indonesia
Tel. 021-131, email: bicara@bi.go.id


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