Indonesia records benign inflation in October as foodstuff prices decline
Posted by on 04 November 2019
Indonesia recorded a slight increase in consumer prices in October as lower foodstuff prices offset hikes in those of food and beverages, cigarettes and tobacco, Statistics Indonesia (BPS) announced on Friday.
Inflation stood at 0.02 percent last month, reversing the 0.27 percent deflation in September. The latest figure was also much lower than the 0.28 percent headline inflation rate recorded in the same period last year.
Year-to-date (ytd) inflation remained at the same level as last month of 2.22 percent, while annual inflation in October was penciled in at 3.13 percent. The latest inflation rate remains well within Bank Indonesia’s target of between 2.5 and 4.5 percent this year.
Core inflation stood at 0.17 percent in October while administered prices and volatile food prices recorded inflation at 0.03 percent and deflation at 0.47 respectively.
“A hike in the prices of rice, prepared food, filtered cigarettes and white cigarettes contributed to October’s inflation,” BPS head Suhariyanto said in Jakarta on Friday.
Although foodstuff prices went down 0.41 percent in October, the prices of food and beverages, cigarettes and tobacco rose 0.45 percent.
The lower foodstuff prices were mainly caused by declining prices of red chilli as the commodity was in harvest in many regions across the country, as well as by declining egg prices.
Core inflation of 3.2 percent yoy indicated that the people’s purchasing power remained healthy, he said.
Suhariyanto expressed optimism that the benign inflation rate until October would mean that the government would achieve its inflation target this year.
“We project the inflation pattern in November to stay flat, but we should be aware of the increased demand for commodities and air travel in December due to the [Christmas] holiday and preparations for the New Year celebration,” he said.