Indonesia’s March 2023 inflation under control

Visitors packed several food outlets at the Muslim LifeFair which took place on March 17-19, 2023 in Kemayoran area, Jakarta. (Indonesia Window)

Indonesia’s March 2023 inflation was recorded at 0.18 percent on a monthly basis (month-to-month/mtm), based on data from the Statistics Indonesia.


Jakarta (Indonesia Window) – The central bank, Bank Indonesia (BI), noted that Indonesia’s March 2023 inflation, which coincided with the start of the National Religious Holidays period, remained under control.


Based on data from the Statistics Indonesia, the March 2023 inflation was recorded at 0.18 percent on a monthly basis (month-to-month/mtm), the Executive Director of the BI Communication Department, Erwin Haryono, said in a written statement quoted by Indonesia Window on Wednesday.

According to Erwin, this figure is not much different from the previous month’s inflation of 0.16 percent (mtm).

The realization of the Consumer price index (CPI) inflation in March 2023 was lower than the historical pattern of inflation during the early Ramadan period.


With these developments, the annual CPI inflation fell to 4.97 percent (year-on-year/yoy) from the previous month’s inflation of 5.47 percent (yoy).

This development was inseparable from Bank Indonesia’s monetary policy response and the close synergy in controlling inflation among the central bank and the central government, regional governments, and other strategic partners in the Central and Regional Inflation Control Teams through the strengthening of the National Movement for Food Inflation Control program.

In the future, Bank Indonesia believes that inflation would remain under control in the range of 3.0 ± 1 percent in the first semester of 2023 and CPI inflation would return to the target of 3.0 ± 1 percent starting September 2023 after the end of the base effect of the adjustment in the prices of subsidized fuel oil last year.


Bank Indonesia will continue to strengthen coordination with the government (at central and regional levels) in controlling inflation, including welcoming the National Religious Holidays period.

Inflation in March 2023 was affected by an increase in core inflation which was recorded at 0.16 percent (mtm), a slight increase compared to the previous month’s inflation of 0.13 percent (mtm).

The limited rise in core inflation was in line with the gradual increase in demand amidst pressure on declining global commodity prices.


The main commodities contributing to core inflation are house rentals, wages for household assistants, and gold jewelry.

On an annual basis, core inflation in March 2023 was recorded at 2.94 percent (yoy), lower than inflation in the previous month of 3.09 percent (yoy).

Inflation in the volatile foods category remained under control. This group recorded inflation of 0.29 percent (mtm), stable compared to inflation in the previous month of 0.28 percent (mtm).


This development was mainly contributed by the deflation of red chili and shallot commodities. Meanwhile, the commodities of rice, cayenne pepper and garlic contributed to inflation.

The volatile foods group experienced annual inflation of 5.83 percent (yoy), down compared to the previous month’s inflation of 7.62 percent (yoy). Administered prices inflation was lower than the previous month.

The administered prices group recorded inflation of 0.12 percent (mtm), down from the previous month’s inflation of 0.14 percent (mtm).


The lower monthly inflation was mainly due to the reduction in tariffs for Regional Drinking Water Companies (locally known as PAM).

The decline in administered prices inflation was further restrained by inflation in air transport, gasoline and various types of cigarettes in line with increased air mobility, price adjustments for non-subsidized gasoline and increases in tobacco excise rates.

On an annual basis, the administered prices group experienced inflation of 11.56 percent (yoy), lower than inflation in the previous month which amounted to 12.24 percent.


Reporting by Indonesia Window

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