Indonesia books annual inflation at 4.94 pct, relatively well maintained

Inflation of 4.94 percent (yoy) is considered still under control because Indonesia’s core inflation is recorded at 2.85 percent.

 

Jakarta (Indonesia Window) – Head of the Statistics Indonesia (BPS) Margo Yuwono stated that Indonesia’s annual inflation has increased to 4.94 percent in July 2022 compared to the same period last year, but this is still in a relatively good and maintained condition.

“Compared to several G20 countries, in particular, our inflation is still relatively under control,” he told a press conference here on Monday (Aug. 1).

According to Margo, inflation of 4.94 percent (year-on-year/yoy) was considered still under control because the core inflation reflected Indonesia’s still good economic fundamentals, which was 2.85 percent.

Based on data from the Organization for Economic Cooperation and Development (OECD), Indonesia, which experienced inflation of 4.4 percent (yoy) in June, was also still relatively lower than several G20 member countries.

In June, South Korea experienced inflation of 6.1 percent (yoy), the United Kingdom (UK) 8.2 percent (yoy), the United States (US) 9.1 percent (yoy) and the European Union 9.6 percent (yoy).

According to the Head of BPS, Indonesia’s current inflation is still considered safe because the core inflation of 2.85 percent is relatively low. “This illustrates that our economic fundamentals are still good,” Margo noted.

He explained that so far the food and energy crisis has put pressure on domestic inflation, especially in the energy component, which continues to strengthen.

On the other hand, the impact of energy inflation due to the global crisis has been able to be mitigated through the government’s subsidy policy.

“The increase in energy prices can be reduced through government subsidies,” Margo added.

Meanwhile, food inflation was caused more by disruptions in domestic supply of volatile food commodities due to bad weather conditions in several production centers.

Previously, the government had increased the energy subsidy budget from 443 trillion rupiahs (29.7 billion U.S. dollars) to 520 trillion rupiahs (34.9 billion U.S. dollars) as a consequence of not increasing fuel, liquefied petroleum gas (LPG) and electricity prices when world energy prices soared.

Reporting by Indonesia Window