BI Boss Says Volatile Food Continues Deflation

Governor of Bank Indonesia (BI) Perry Warjiyo. (Photo: Doc. ANTARA)

JAKARTA - Bank Indonesia (BI) Governor Perry Warjiyo conveyed that the cause of deflation for three consecutive months was due to a decrease in food prices as reflected in the volatile food group continuing deflation.

Meanwhile, the volatile food group in July 2024 experienced deflation of 1.92 percent (mtm), deeper than the previous month's deflation of 0.98 percent (mtm). Meanwhile, on an annual basis, volatile food groups experienced inflation of 3.63 percent year on year (yoy), a decrease from inflation in the previous month of 5.96 percent (yoy).

"Well, if the food inflation drops, the people will be more prosperous. Food is mostly for the people, right? That's like that. So, why is the government, the Coordinating Minister for the economy, the Minister of Finance, the Minister of Home Affairs, and BI strengthening coordination in the inflation control team," he said at the KSSK III Periodic Meeting Results Press Conference in 2024, Friday, August 2.

The deflation of the volatile food group was contributed by shallot commodities, tomatoes and broiler meat.

Furthermore, the decline in food commodity prices is supported by increased supply along with the continuing harvest season and decreasing feed prices for broiler meat commodities.

However, Perry indirectly said that people's purchasing power fell as reflected in the condition of core inflation in July 2024, which was recorded at 0.18 percent (mtm), higher than inflation in the previous month of 0.10 percent (mtm).

"And this rising movement of core inflation shows its demand is rising. Remember, core inflation is the difference between demand and supply," he explained.

Despite moving up, Perry ensured that the core inflation condition was still under control because it was still below the level of 2.5 percent.

In the future Perry said that his party estimates that volatile food inflation will still be controlled, supported by the synergy of controlling the Central Inflation Control Team (TPIP) and the Regional Inflation Control Team (TPID) through the National Food Inflation Control Movement (GNPIP) in various regions.

For information, on an annual basis, core inflation in July 2024 was recorded at 1.95 percent (yoy), an increase from core inflation in the previous month of 1.9 percent (yoy).