Statistics Indonesia reported the trade deficit in February worth of US$2.34 billion, said the agency today (03/16) - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – Indonesia noted the monthly inflation reached 0.39 percent in January 2020, with the consumer price index (CPI) of 104.33, the highest since June 2019, after a 0.34 percent gain in the prior month, Statistics Indonesia announced today (02/03). The month’ inflation mostly driven by rising prices in the food, beverage and tobacco sectors.

The statistics agency’ chief Suhariyanto said the country’ annual inflation rate decreased to 2.68 percent from 2.72 percent in the previous month. This was the lowest inflation rate since March last year. While annual core inflation fell to 2.88 percent, the lowest since September 2018.

“The highest inflation rate was recorded in Meulaboh of 1.44 percent, while the lowest rate noted in Gorontalo at 0.33 percent. The highest deflation was Baubau with 1.33 percent and the lowest deflation recorded in Kudus of 0.01 percent,” Suhariyanto said in a press conference at his office.

This was the lowest inflation rate since March last year, as prices rose for most indexes of expenditure groups such as food, beverage, and tobacco by 1.62 percent, followed by clothing and footwear by 0.12 percent, housing, water, electricity and household fuels by 0.13 percent, and household appliances, equipment and routine maintenance by 0.09 percent.

Then, the health group by 0.42 percent, information, communication, and financial services by 0.04 percent, recreation, sports and culture by 0.18 percent, food and beverage/restaurant provision by 0.19 percent and the personal care group and other services by 0.46 percent.

While deflation was affected by the transportation group by 0.89 percent and education by 0.14 percent, Suhariyanto said, adding the inflation figure was calculated using the bureau’s new formula, which changes the base year of the CPI to 2018 from 2012 and includes the new pattern of consumption. The bureau said it cannot be compared with December’s rate of 2.72 percent, which was calculated with its old formula.

Recently, the government and Bank Indonesia (BI) agreed on three strategic steps to keep inflation within the target range. Firs steps it to maintain price affordability, supply availability, smooth distribution, and effective communication.

In the National Inflation Control Roadmap 2019-2021, the policy is pursued by giving priority to the availability of supply and smooth distribution, which is supported by a more conducive ecosystem and the availability of accurate data.

Second, strengthening the implementation of the National Inflation Control Roadmap 2019-2021 and also implementing the Roadmap for Inflation Control at the Provincial level. And third, strengthening the coordination of the central and regional governments in controlling inflation through the holding of the National Inflation Control Coordination Meeting.

According to the BI data, the inflation rate in the last four years has been positively supported by the synergy of monetary and fiscal policies in managing healthy macroeconomic conditions and structural policies, including infrastructure development in various regions that improve connectivity and smooth distribution.

Going forward, the government at the central and regional levels also the central bank will continue to strengthen policy coordination to bring inflation in a downward trend in the range of 3±1 percent in 2020 and 2021, so it can support strong, sustainable, balanced and inclusive economic growth.

Governor Perry Warjiyo stressed that food supply and distribution is more than enough. Moreover, the central bank claimed a manageable Rupiah depreciation. He revealed, that BI will coordinate with the central and regional governments to maintain low inflation.

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