If the inflation forecast comes true, the yearly inflation in July 2019 will reach 3.12 percent year-on-year, or lower than the mid-point of the inflation target range of 2.5-4.5 percent.
"The inflation rates in May and June 2019 rose slightly in line with their seasonal pattern. In the past two months, there was the momentum of Ramadhan and Eid al-Fitr," BI Governor Perry Warjiyo stated here on Friday.
The BI governor explained that the inflation forecast for July 2019 was based on the result of a price survey conducted by the central bank in the first week of July 2019.
The prices of several foods decreased in July 2019, thereby adding to the deflation. Likewise, the tariffs of intercity means of transportation are also projected to record a deflation of close to 0.08 percent in July 2019.
"The prices of several commodities, including those related to foodstuffs, such as purebred chicken meat, onion, and garlic, which had risen in the earlier months, were down this month. Similarly, the tariffs of intercity transportation modes also recorded a deflation of 0.08 percent," he remarked.
The low inflation rate in July 2019 will make it easy for the nation to achieve the inflation target of 2.5-4.5 percent in 2019.
"In July 2019, the inflation returned to its pattern of being low and under control, thereby confirming our forecast that the year-end inflation will, Insya Allah (God willing), be lower than the targeted mid-point of 3.5 percent," he remarked.
The Central Bureau of Statistics (BPS) had announced early this month that the inflation rate in June 2019 rose 0.55 percent due to a hike in the prices of red chilly, and various vegetables as well as gold jewellery.