Inflation remains under control in October: BI

Inflation remains under control in October: BI

Illustration. President Joko Widodo greeted residents while driving by motorbike to Anyar Market, Tangerang, Banten, Sunday (11/04/2018), to check prices for basic needs and match inflation rates. (ANTARA PHOTO/Puspa Perwitasari/pras.)

Jakarta (ANTARA News) - Headline inflation remained under control in October 2018 within the target range of 3.5 percent, give or take one percent.

"CPI inflation stood at 0.28 percent month-to-month (mtm) in the reporting period after posting deflation of 0.18 percent mtm the month earlier," Bank Indonesia (BI) Executive Director for Communications Agusman noted in a statement from BI received here on Wednesday.

Volatile foods (VF) and administered prices (AP) were the main contributors to the October inflation, while core inflation was stable.

"Hence, cumulatively, during the January-October 2018 period, inflation stood at 2.22 percent year-to-date (ytd) and 3.16 percent year-on-year (yoy) annually, which is within the target corridor for 2018," Agusman noted.

VF recorded inflation on rising prices of food commodities. VF recorded 0.17 percent mtm inflation after posting deflation for two consecutive periods.

Foodstuffs were the main contributors to deflation, particularly red chilli, rice, and oranges. In contrast, purebred chicken eggs and shallots experienced price corrections. Annually, price pressures on VF stood at 4.48 percent yoy, down from 3.75 percent yoy the month earlier.

He said that AP succumbed to price pressures in October 2018 after the government adjusted the non-subsidized fuel prices.

AP recorded 0.32 percent mtm inflation in the reporting period after posting 0.00 percent mtm the month earlier.

Such developments were explained by higher petrol prices, adjusted to reflect the rising non-subsidized fuel prices -- Pertamax, Pertamax Turbo, Pertamax Dex, and Dexlite -- on October 10, 2018.

In contrast, airfares continued to experience post-Eid corrections. Annually, inflationary pressures on AP stood at 2.74 percent yoy, up from 2.40 percent yoy the month earlier.

Stable core inflation was maintained at 0.29 percent mtm as compared with 0.28 percent mtm the month earlier.

Agusman revealed that the main drivers of core inflation were house leases, domestic workers` wages, steel reinforcing bar, cement, gold jewelery, and rice with a side dish.

Annually, core inflation stood at 2.94 percent yoy, increasing from 2.82 percent yoy, the month earlier.

Controlled core inflation in October 2018 was linked to policy consistency by BI to anchor rational inflation expectations as well as maintained exchange rate movements in line with the rupiah`s fundamental value.

Moving forward, BI projects inflation within the target range for 2018 at 3.5 percent, give or take one percent.

To this end, policy coordination between BI and the central government and regional administrations will constantly be strengthened to control low and stable inflation.

Editing by Azis Kurmala, Bustanuddin