Indonesia's Inflation Rate Hit the Lowest Since May 2000

6 months ago . 1 min read
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Marella Putri
Writer at Forbes Indonesia
Indonesia's Inflation Rate Hit the Lowest Since May 2000

by Ulisari Eslita

Indonesia recorded the lowest annual inflation rate since May 2000, as the novel coronavirus stretched deep the country’s economy and depressing demands. Statistics Indonesia (BPS) announced the inflation steeply dropped by 1.96% in June yearly compared with 2.19% in May. However, every month, the inflation ticked up by 0.18% from 0.07%, exceeding the central bank's expectation, which is -0.01%

“In the previous years, the peak of inflation took place during Ramadan and Idul Fitri holiday. But the pattern didn’t happen this year,” said Suhariyanto, head of BPS.

BPS reported that consumer prices for health, education, as well as food, beverages & tobacco rose the most, at 4.16%, 3.66%, and 3.03%, respectively. The increase in the last category was attributed to chicken, egg, and coconut prices.

Meanwhile, transportation, as well as information, communication & financial services dropped the most, deflating by 0.95% and 0.3%, respectively.

The prices for housing, water, electricity, and fuels remain manageable as the government extends its electricity scheme for the next three months.

According to Bahana Sekuritas’ recent research, Indonesians' consumer behavior was relatively unchanged during the first month of PSBB (large-scale social restrictions). Even more, the prices of food and beverage provided in restaurants rose by 0.28% month-on-month since the government has allowed shopping centers to operate in half capacity following instruction on new normal transition.

“In upcoming months, we might see an uptick in core inflation as the government gradually eases the virus containment measures and Bank Indonesia continues its expansionary stance,” Raden Rami Ramdana, Bahana Sekuritas analyst, stated in the recent research.


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