JAKARTA The Central Statistics Agency (BPS) stated that general inflation (consumer price index / IHK) fell to 3.52 percent year on year (yoy) in June from the previous 4.00 percent last May.

Deputy for Distribution and Services Statistics, Pudji Ismartini, revealed that this condition occurred due to two things. First, controlling the volatile inflation movement, especially from food ingredients (volatile food). Second, the decline in price inflation regulated by the government (administered price) in line with the increasingly neutralized increase in fuel prices in the second half of last year.

Meanwhile, core inflation only moved slightly to 0.12 percent month to month (mtm) in June compared to 0.06 percent last May. This figure is fairly moderate when compared to the April 2023 Eid period which amounted to 0.25 percent mtm.

The relatively well-maintained core inflation was confirmed with an annual record (year on year/yoy) to 2.58 percent as of June from the previous 2.66 percent as of May.

"Inflation in emerging markets and developing economies (including Indonesia) is predicted to decline in line with lower commodity prices," Pudji said, citing the World Economic Outlook report, Monday, July 3.

Meanwhile, BPS's presentation is good news for Bank Indonesia (BI). This is because the monetary authority is very concerned about the inflation rate because it is related to the stability of the rupiah exchange rate and the determination of the benchmark interest rate.

In fact, the central bank firmly states that inflation, specifically for core inflation, is one of the main references in the interest rate policy because it is directly connected to supply and demand (demand) aspects in the market. As long as you know, Bank Indonesia has maintained the BI 7-Day Reverse Repo Rate (BI7DRR) by 5.75 percent since January 19, 2023 ago.


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