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Indonesia sees another record low inflation since 2000

A motorcycle taxi driver waits for orders in the business district on Jl. Sudirman (Jakarta, Indonesia) on April 26. (Antara/Dhemas Reviyanto). Sketched by the Pan Pacific Agency.

JAKARTA, Aug 4, 2020, Jakarta Globe. Inflation in Indonesia has slowed down in July to the lowest level in more than two decades, as consumer demand has yet to recover despite the government’s decision to reopen the economy, Jakarta Globe reported.

The country’s consumer price index, the broadest measure for gauging the prices of goods and services in the country, rose 1.54 percent in July from the same month a year ago, data from the Central Statistics Agency (BPS), showed on Monday. That compared to 1.96 percent inflation in June.

Since Indonesia confirmed its first Covid-19 cases in March and subsequently imposed the so-called large-scale social restriction (PSBB), the country inflation has been slowing down. July’s rise marked the country’s record-low inflation since 2000, following the similar records in the previous two months.

“Many countries have experienced an economic slowdown, or even contraction,” Suhariyanto, the head of BPS said.

“Commodity prices also tended to decline, reducing the inflationary pressures in various countries. Some even lead to deflation,” Suhariyanto said.

Suhariyanto said food and beverage prices and transportation costs declined in July. But, the prices of clothes, education, and recreation increased slightly.

Core inflation, which excludes fluctuation on prices of raw foods and government’s administered price like electricity and fuel, fell to 2.07 percent in July from 2.23 percent a month earlier.

“The core inflation is still weakening. That means we still need to increase the people’s purchasing power,” Suhariyanto said.

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