BI: Inflation Maintained Evidence Of Consistency In Government Policies

Illustration (Photo: Doc. Antara)

JAKARTA Bank Indonesia revealed that inflation in July 2023 is maintained in the target range of 3 percent plus minus 1 percent. Based on data from the Central Statistics Agency (BPS), inflation in the Consumer Price Index (IHK) in July 2023 was recorded at 0.21 percent month to month (mtm), bringing it to 3.08 percent year on year (yoy) on an annual basis.

Head of the BI Communications Department Erwin Haryono said that this achievement was lower than the previous level of June 2023 which was 3.52 percent yoy.

"The maintenance of inflation within the target range is inseparable from the consistency of monetary policy and the close synergy of inflation control between Bank Indonesia and the Government (central and regional) in the Central and Regional Inflation Control Team (TPIP and TPID) through strengthening the National Movement for Food Inflation Control (GNPIP) in various regions," he said in a written statement quoted on Wednesday, August 2.

Erwin explained that core inflation was maintained low with a score of 0.13 percent mtm or relatively stable compared to the previous month of 0.12 percent mtm.

"This development was mainly contributed by commodity inflation, school costs in line with the start of the new school school year," he said.

On an annual basis, core inflation in July 2023 was recorded at 2.43 percent yoy, lower than inflation in the previous month of 2.58 percent.

Then, volatile food group inflation decreased with a record of 0.17 percent mtm, lower than the previous month which was 0.44 percent mtm. Erwin said, this development was mainly contributed by deflation in shallot and cayenne pepper commodities.

Meanwhile, the decline in inflation was further restrained by inflation in broiler meat, red chili, and garlic commodities. On an annual basis, volatile food groups experienced a deflation of 0.03 percent yoy, a decrease compared to previous month's inflation which was recorded at 1.20 percent.

Then, the administrative price group inflation was recorded to be higher than the previous month which recorded 0.44 percent mtm, an increase from the previous month which recorded a deflation of 0.02 percent.

"This development is influenced mainly by inflation of air transport rates and filter kretek cigarettes due to increased mobility during school holidays and continued transmission of the increase in tobacco excise rates," he said.

On an annual basis, the administrative price group inflation continued to decline to 8.42 percent yoy, lower than the previous month's inflation of 9.21 percent.

"In the future, Bank Indonesia believes inflation will remain under control in the target range of 3 percent plus minus 1 percent in the remainder of 2023 and 2.5 percent plus minus 1 percent in 2024," Erwin concluded.