Going forward, Bank Indonesia will have to consistently maintain price stability and strengthen policy coordination with the government at the central and regional levels to ensure that inflation remains low and below the midpoint of the inflation target range of 3.5±1 percent in 2019.
The declining CPI inflation in June 2019 can be attributed to the declining inflation of the volatile food group in line with the end of the seasonal pattern of Ramadan and Eid al-Fitr, Onny Widjanarko remarked.
The Volatile food group recorded inflation of 1.70 percent (mtm), which was a decline compared to the inflation in the previous month of 2.18 percent (mtm).
The declining inflation of volatile food is attributable to the drop in demand of onions, purebred chicken meat, and purebred chicken eggs, after the end of Ramadan and Eid al-Fitr.
Annually, the inflation of the volatile food group was recorded at 4.91 percent (yoy), increasing from the previous month of 4.08 percent (yoy), he said.
Administered prices group, which recorded deflation in line with the positive impact of airfare adjustment, also contributed to the declining CPI inflation.
Administered prices group in June 2019 recorded deflation of 0.09 percent (mtm), which was a decrease compared to the previous month when it stood at 0.48 percent (mtm). Deflation of the administered prices group was attributed to the declining airfare in line with the continued impacts of the applied policy on the declining upper limit of airfare.
Annually, the administered prices group recorded inflation of 1.89 percent (yoy), lower than the previous month of 3.38 percent (yoy).
Core inflation was controlled despite a slight increase compared to levels in the previous month.
Core inflation in June 2019 was recorded at 0.38 percent (mtm), which was an increase compared to the previous month of 0.27 percent (mtm).
The main commodities that contributed to the inflation of the core group are rice and the side dishes, gold jewelry, preserved fish, noodles, and wages of domestic helpers, he remarked.
Annually, core inflation was recorded at 3.25 percent (yoy), increasing from 3.12 percent (yoy) the previous month. The controlled core inflation was closely related to the consistent policy of Bank Indonesia in controlling the expected inflation, including maintaining the fluctuating exchange rate in line with its fundamentals. (INE)
EDITED BY INE