Bank Indonesia Optimistic Inflation 2025 Controlled

Illustration (Photo: Doc. ANTARA)

JAKARTA - Bank Indonesia (BI) stated that the inflation of the Consumer Price Index (IHK) in January 2025 decreased compared to the previous month.

Based on data from the Central Statistics Agency, the JCI in January 2025 recorded deflation of 0.76 percent (mtm), so that on an annual basis, IHK inflation decreased to 0.76 percent (yoy) from the previous month's realization of 1.57 percent (yoy).

Executive Director of the BI Communication Department, Ramdan Denny Prakoso, said that deflation was caused by the administrative prices group, mainly contributed by electricity tariff commodities.

Denny said that low-maintained IHK inflation was the result of the consistency of monetary policy and the tight synergy of inflation control between Bank Indonesia and the Government (Center and Region) in the Central and Regional Inflation Control Team (TPIP and TPID) through the implementation of the National Food Inflation Control Movement (GNPIP) in various regions.

"In the future, Bank Indonesia believes that inflation will remain under control in the 2.5 percent target range plus minus 1 percent by 2025," he said in his statement, Tuesday, February 4.

According to Denny, core inflation was maintained low, where in January 2025 it was recorded at 0.30 percent (mtm), an increase from the realization in the previous month of 0.17 percent (mtm).

Denny said the development of core inflation was influenced by the increase in global commodity prices and seasonal patterns at the beginning of the year, amid maintained inflation expectations.

"The realization of core inflation in January 2025 was contributed mainly by inflation of cooking oil, gold jewelery, and housing rental costs," he explained.

On an annual basis, core inflation in January 2025 was recorded at 2.36 percent (yoy), an increase from the previous month's realization of 2.26 percent (yoy).

Denny said that volatile food group inflation in January 2025 experienced inflation of 2.95 percent (mtm), an increase from inflation in the previous month of 2.04 percent (mtm).

"The volatile food group inflation was contributed, especially by various commodities of chili and broiler meat," he said.

Denny said the increase in VF inflation was influenced by high rainfall weather conditions in a number of major production centers that affected the production of various chili commodities and increased input costs for feed production and seeds for broiler meat commodities.

On an annual basis, volatile food groups experienced inflation of 3.07 percent (yoy), an increase from the previous month's realization of 0.12 percent (yoy).

In the future, Denny said that volatile food inflation is predicted to remain under control, supported by close synergy between Bank Indonesia and TPIP and TPID through GNPIP in various regions.

The administrative price group in January 2025 experienced a deflation of 7.38 percent (mtm), a decrease from the previous month's realization which recorded inflation of 0.03 percent (mtm).

According to him, the administrative price group deflation was mainly contributed by electricity tariff commodities in line with the implementation of the 50 percent electricity tariff discount policy for household customers with an installed power of up to 2,200 VA power and normalization of transportation rates after the Nataru HBKN period.

On an annual basis, the administrative price group deflation was recorded at 6.41 percent (yoy), down from the previous month's realization which recorded inflation of 0.56 percent (yoy).