Monthly Inflation Down, Bank Indonesia: Results Of Strengthening Synergy With Government

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JAKARTA - Bank Indonesia (BI) stated that the decline in monthly inflation of the consumer price index (IHK) (month to month/mtm) from 0.34 percent in January to 0.16 percent in February further supports inflation control expectations this year.

Director of the BI Communication Department Fadjar Majardi said this development could not be separated from the positive influence of the central bank's monetary policy response.

"We continue to encourage the strengthening of close synergies 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 in an official broadcast quoted on Thursday, March 2.

According to Fadjar, IHK's sloping inflation last month was also supported by a decline in core group inflation and volatile food. He detailed that core inflation in February was 0.13 percent (mtm), lower than January by 0.33 percent (mtm).

"The decline in core inflation is in line with the normalization of seasonal patterns at the beginning of the year, especially from housing group commodities," he said.

Meanwhile, volatile foods group inflation also decreased from the previous month's development, which was 0.28 percent mtm compared to 1.40 percent mtm.

"These developments are mainly contributed by broiler meat commodities, broiler eggs, and cayenne pepper," he said.

Meanwhile, the administrative prices group recorded inflation of 0.14 percent (mtm), an increase from the previous month's realization which experienced deflation of 0.55 percent (mtm).

In general, IHK's annual inflation rose to 5.47 years on year (yoy) in February compared to January which was 5.28 percent (yoy).

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

"Bank Indonesia will continue to strengthen inflation control, including through coordination with the government to ensure continued decline in inflation, including during the National Religious Holiday (HBKN) period," concluded Fadjar.