The higher-than-expected inflation rate was chiefly caused by disruption in the supply of such commodities as onion, red chili, chicken meat and beef amidst rising demand during the fasting month of Ramadhan, the central bank said in a press statement released on Thursday.
This caused monthly inflation from volatile foods to more than triple to 6.07 percent month-to-month or 16.12 percent year-on-year, it said.
The impact of subsidized fuel price hike on transport fares had reached its peak in July, contributing more than a half of the realized consumer price index (CPI) inflation, it said.
As a consequence, administered price inflation rose to 7.90 percent mtm or 15.10 percent yoy, and core inflation remained manageable although it rose to 0.99 percent mtm or 4.44 percent yoy, fueled by a shortfall in global commodity prices and manageable demand, it said.
Looking ahead, the inflation is expected to ease and return to its normal level in upcoming months, with CPI inflation projected to fall to 0.9 percent in August and 0.1 percent in September, it said.
The declining inflation will be fueled by the government`s policy to speed up and raise beef imports as well as to open entry points of imported onion in Java, it said.
In addition, the low inflation will also be influenced by the declining impact of fuel price hike and normal demand after the Muslim holiday of Lebaran.(*)
Editor: Heru Purwanto
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