Indonesia's chief economic minister Darmin Nasution - Photo: TheInsiderStories.

JAKARTA (TheInsiderStories) – The Government and Bank Indonesia (BI) ensured that the 2019′ inflation rate remains within the targets 3.5 percent plus-minus 1 percent, said senior official on Wednesday (07/10). Until first semester (1H) of 2019, the realization of inflation stayed at the level of 3.28 percent.

“A series of policies to reduce air freight rates have also contributed to maintaining inflation in the Ramadhan and Eid periods and the first semester of 2019,” coordinating minister for economic affairs Darmin Nasution said while leading the high-level meeting of the central inflation control team at his office in Jakarta.

The government and Bank Indonesia have inventoried several challenges in order to achieve the 2019 inflation target, including the potential for long droughts and the challenge of maintaining inter-time and inter-regional staple food availability.

The solution, said Nasution, the government is committed to maintaining the volatile foods contribution to inflation rate at a maximum of 5 percent. In the long term, he continued, creating ecosystems that support the realization of staple and inter-regional staple food availability.

In June, Indonesia experienced inflation of 0.55 percent with the Consumer Price Index (CPI) of 138.16. While the inflation rate for the calendar year (January-June) 2019 was 2.05 percent, statistics agency data showed.

Indonesia’s annual inflation rate declined to 3.28 percent in June from 3.32 percent in the previous month, but above market expectations of 3.18 percent.

Prices rose at a softer pace for both transportation, communication & financial services (1.91 percent vs 3.58 percent in May) and health (3.02 percent vs 3.10 percent).

On the other hand, cost rose further for housing & utilities (2.42 percent vs 2.39 percent); foodstuff (4.91 percent vs 4.14 percent); prepared food, beverages, cigarette & tobacco (3.98 percent vs 3.79 percent); clothing (3.77 percent vs 3.31 percent); and education, recreation & sport (3.21 percent vs 3.20 percent).

Annual core inflation rose to 3.25 percent in June, the highest since April 2017 and also above forecasts of 3.12 percent. On a monthly basis, consumer prices went up 0.55 percent in June, easing from a 0.68 percent gain in the prior month.

The agency shows, out of 82 CPI cities, 76 cities experienced inflation and 6 cities experienced deflation. The highest inflation occurred in Manado at 3.60 percent with CPI of 140.02 and the lowest inflation occurred in Singaraja at 0.02 percent with CPI of 144.11.

While the highest deflation occurred in Tanjung Pandan at 0.41 percent with CPI of 145.67 and the lowest occurred in Jayapura at 0.08 percent with CPI of 142.37.

The core component in June 2019 experienced inflation of 0.38 percent. While the inflation rate for the core component of the calendar year (January – June) 2019 is 1.55 percent and the inflation rate for core components year after year (June 2019 to June 2018) is 3.25 percent.

In addition, the number of foreign tourist visits to Indonesia in May 2019 increased by 1.10 percent compared to the number of visits in May 2018 (YoY). Meanwhile, when compared to April 2019, the number of foreign tourists visiting in May 2019 decreased by 3.19 percent.

Cumulatively (January-May 2019), the number of visits to Indonesia reached 6.37 million foreign tourists, up 2.70 percent compared to the number of foreign tourists visiting the same period in 2018 which amounted to 6.20 million visits.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com