Photo BPS

JAKARTA (TheInsiderStories)–Indonesia’s inflation accelerated 0.59 per cent month-on-month in June from 0.21 per cent in May, the country’s Central Statistics Agency reported on Monday (02/07).

The Head of Central Statistics Agency Suhariyanto said core inflation accelerated to 0.24 per cent month-on-month in June from 0.21 per cent in May.

The inflation in June 2018 was triggered by an increase of administered prices, the airlines ticket price contributed 0.15 per cent of the headline inflation, followed by inter-city transportation with 0.08% and train fares with 0.01%.

Rising transportation fares are in line with seasonal factor as millions of Indonesians took the long Idul Fitri holiday to visit their hometowns.

“Inflation in June 2018 was mainly due to administered prices inflation of 1.38% with a share of 0.28%,” he continued.

Inflation of volatile food items were 0.90 per cent month on month and 4.60 per cent year on year, which is relatively contained considering the high-inflation period of Ramadhan.

All 82 cities surveyed experienced inflation acceleration with the highest was Tarakan, North Kalimantan 2.71 per cent and the lowest were Medan and Pekanbaru at 0.01 per cent.

Suhariyanto said the inflation in June is considered low compared to the previous years as it was in the period of Eid al-Fitr. In 2016 and 2017, inflation in the Eid al-Fitr month reached 0.69 per cent. Indonesian have tradition to spend a lot of moneyduring Eid al-Fitr. This tradition generates inflation in the past years.

Indonesia’s central bank estimated inflation to remain within its target this year, at 2.5-4.5 percent. In the last policy rate meeting, the central bank decided to raised its key interest rate by 50 basis points (bps) to 5.25 per cent, taking into account of tame inflation figure. BI expects inflation of 2.5 per cent to 4.5 per cent in 2019.