Regarding Down Payment Inflation, BI: The Result Of Coordination Of Control Policy

Illustration (Photo: Doc. Antara)

JAKARTA Bank Indonesia (BI) positively welcomes the inflation book January 2023 which continues to slope compared to the end of 2022. It is known that the Consumer Price Index (IHK) inflation is at the level of 5.28 percent year on year (yoy) and 0.34 percent year to date (ytd).

Head of the BI Communication Department Erwin Haryono said the score earlier this year was lower than the previous month with 5.51 yoy and 0.66 percent ytd.

"The monthly inflation realization was mainly driven by the decline in volatile food and administrative prices group inflation," he said in a written statement quoted on Thursday, February 2.

According to Erwin, the increasingly sloping development of inflation is the result of joint work between various related elements.

"This is inseparable from the influence of coordination of inflation control policies with the central government, local governments, and other strategic partners through the Central and Regional Inflation Control Team (TPIP and TPID) and the National Food Inflation Control Movement (GNPIP) in various regions," he said.

Meanwhile, in terms of core inflation, which is a big concern for BI, it is recorded at 0.33 percent mtm or higher than December 2022 which was 0.22 percent mtm.

"The increase in core inflation is in line with the seasonal pattern of the beginning of the year, especially in inflation of home rental commodities and home contracts," he added.

Meanwhile, on an annual basis, core inflation in January 2023 was recorded at 3.27 percent yoy, lower than inflation in the previous month of 3.36 percent yoy.

"In the future, Bank Indonesia believes core inflation will remain in the range of 3 percent plus minus 1 percent in the first semester of 2023 and IHK inflation will return to its target of 3 percent plus minus 1 percent in the second semester of 2023," he stressed.

In detail, volatile foods group inflation in January 2023 decreased to 1.40 percent mtm, less than inflation in the previous month which was 2.24 percent mtm. While on an annual basis it was 5.71 percent yoy, higher than inflation in the previous month which was 5.61 percent yoy.

The development was mainly influenced by deflation in broiler eggs and tomatoes. Meanwhile, inflation of rice, various chilies, and fresh fish was recorded to increase in line with increasing demand at the beginning of the year and decreased supply due to less conducive weather conditions," he explained.

Then, the administered prices group recorded deflation from 0.73 percent mtm to 0.55 percent mtm and on an annual basis from 13.34 yoy percent to 12.28 percent yoy.

"This is influenced by deflation of air transport and gasoline type fuel in line with price normalization after Christmas and New Year and the reduction in fuel surcharge rates imposed by airlines, as well as a decrease in non-subsidized gasoline prices in early January 2023," he said.

"Bank Indonesia will continue to strengthen the response to monetary policy, and continue to coordinate with the government to ensure the decline and control of inflation," Erwin concluded.