In the first three weeks of August a survey by the central bank showed a deflation of 0.06 percent month to month (mtm).
"It would not be different much for the whole month from the first three weeks," Executive Director of Monetary and Economic Policy of the central bank Juda Agung said here on Friday.
Normally , there is correction in August on weak demand after a high consumption in the Islamic fasting month in June and July, he said.
As a result inflation in August would be lower than 3.21 percent in July year-on-year.
Last year inflation in August on year was 7.18 percent.
As from January, 2016, inflation on year has continued to climb down. In the second quarter of this year inflation on year rose only in June to 3.45 percent before going down again 3.21 percent in July.
Bank Indonesia predicted that the countrys inflation in the whole of the year is less than 3.5 percent , closer to the lowest inflation range predicted by the central bank 4 percent plus minus 1 percentage point.
The central bank has been strict in keeping control of one of the macro economic indicators to maintain economic stability.
Other macro economic indicators such as current account balance with deficit this year still in a safe range at US$20 billion or 2.2 percent of the countrys Gross Domestic Product (GDP).
The Central Bank has cut its prediction for the countrys economic growth to 4.9-5.3 percent (yoy).
Inflation is one of the references for the central bank in determining its monetary policy . This year it cut its benchmark interest rate (BI Rate) 100 basis points in July. (*)
Editor: Heru Purwanto
Copyright © ANTARA 2016
