The estimation is based on price developments up to the fourth week of August 2022, chief executive director of BI’s communications department, Erwin Haryono, said in an official statement issued here on Friday.
The main commodities contributing to deflation until August fourth week include shallot, which has contributed 0.17 percent (mtm), red chili 0.13 percent (mtm), and cooking oil and cayenne pepper 0.07 percent (mtm) each, he explained.
Then, broiler meat has contributed 0.04 percent (mtm) to deflation, air freight rates and tomatoes 0.03 percent (mtm), and spinach, garlic, and oranges 0.01 percent (mtm) each.
Meanwhile, several commodities are estimated to have contributed to inflation in the fourth week of August, namely household fuel (BBRT) at 0.08 percent (mtm), and broiler eggs and filtered cigarettes at 0.03 percent (mtm) each.
Then, rice has contributed 0.02 percent (mtm), and cement, bottled water, and potatoes 0.01 percent (mtm) each.
According to Haryono, BI will continue to strengthen coordination with the government and the relevant authorities and optimize the policy mix strategy to maintain macroeconomic and financial system stability to support further economic recovery.
Statistics Indonesia (BPS) earlier recorded inflation of 0.64 percent in July 2022 (mtm), or an increase in the Consumer Price Index (CPI) from 111.09 in June to 111.8.
The inflation was chiefly caused by an increase in the prices of red chili, air transportation fares, shallots, household fuel, and cayenne pepper.
With the inflation in July, the inflation for the calendar year ended July 2022 against December 2021 reached 3.85 percent, while the year-on-year inflation (yoy) for July 2022 against July 2021 was 4.94 percent.
Meanwhile, Finance Minister Sri Mulyani Indrawati earlier said that local governments could use the Rp14-trillion contingency fund for unforeseen and unexpected expenses in the 2022 regional budget (APBD) for efforts to counter inflation.
"In a recent meeting, the President asked local governments to use unexpected funds in the regional budget, which has only been used for Rp1.8 trillion as of this August," she informed during a meeting with the House of Representatives here on Thursday.
The funds can be used by regional administrations just by requesting their arrangement from the Home Minister, while the main regulation has been issued recently.
Indrawati said she expects the unforeseen contingency fund to be used to provide subsidies or compensation to stabilize prices, including regional transportation tariffs.
Furthermore, it is expected that the Regional Inflation Control Team (TPID) will continue to cooperate with the Central Inflation Control Team (TPIP).
During the meeting, BI's senior deputy governor, Destry Damayanti, said that TPIP and TPID are currently focusing on controlling food inflation, which reached 11 percent year on year (yoy) in July.
TPIP and TPID are striving to bring down food inflation to 6 percent yoy, she informed.
"If food inflation is not reduced, it will impact core inflation. So far, we have seen that the inflation of government-administered prices can be controlled, but food inflation is a problem," Damayanti said.
Therefore, BI, together with the government, has formed the National Movement for Food Inflation Control (GNPIP), which must be intensified by TPIP and TPID, she added.
The movement aims to overcome the unbalanced food supply across regions and organize the people's markets in some areas.
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Translator: Sanya D, Azis Kurmala
Editor: Sri Haryati
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