Inflation Will Be Guarded Below 3.5 Percent If Excise On Sweetened Drinks Is Postponed

JAKARTA - Head of Bank Permata economist Josua Pardede maintains inflation expectations will remain at the level of 1.5 percent to 3.5 percent in 2024.

"We maintain inflation expectations to remain within the target range of 1.5 percent - 3.5 percent for this year," he explained in his statement, quoted Tuesday, July 2.

Josua said that in the second semester of 2024, the risk of an increase will come from the application of sweetened plastic excise and packaged drinks, which still depends on the government's decision to postpone this policy.

According to Josua, if the government decides to postpone the policy, inflation could be lower than expected.

"Another risk of inflation can come from potential energy price adjustments if the Rupiah continues to weaken," he explained.

For information, the Central Statistics Agency (BPS) noted that year on year (yoy) inflation in June 2024 was 2.51 percent or sloping from annual inflation in May 2024 at 2.84 percent. Meanwhile, inflation in the calendar year or year to date (ytd) was 1.07 percent.

Acting President Secretary of BPS Imam Machdi said that inflation in June 2024 was more sloping than in June 2023.

"Year on year inflation occurred in June 2024 at 2.51 percent and in the calendar year to date there was 1.07 percent inflation," he said at a press conference in Jakarta, Monday, July 1.

Imam said there was an increase in the consumer price index from 103.68 in June 2023 to 106.28 in June 2024.

According to Imam, inflation in June 2024 on an annual basis was mainly driven by inflation in the food, beverage and tobacco spending group. The group in June 2024 recorded inflation of 4.95 percent with an inflationary contribution of 1.40 percent.

Meanwhile, the main commodities that contribute to inflation include rice, red chilies and machine kretek cigarettes.

Meanwhile, other commodities outside the food and beverage group and tobacco that also contributed significantly to inflation include gold jewelry, air transportation and side dishes.

"The year all provinces experienced the highest inflation in inflation occurred in mountainous Papua with inflation of 5.65 percent while the lowest inflation we could see occurred in the Bangka Belitung Islands with an inflation of 1.08 percent," he said.

As for monthly, there was deflation in June 2024 which was recorded at 0.08 percent on a monthly basis or month to month (mom).