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Inflation surprisingly drops as food prices cool down
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A vegetable seller (left) serves a customer at Gintung Market in Bandar Lampung, Lampung, on June 16. (Antara/Ardiansyah)
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nflation slowed in October following a drop in a wide range of food commodities, but analysts expect the drop to be temporary as risks overshadow the economy in the remaining weeks of the year.
The annual headline figure eased to 5.71 percent last month, down from the 5.95 percent year-on-year (yoy) recorded in September, according to Statistic Indonesia (BPS) data published on Tuesday.
The latest figure was well below projections of several analysts. State-owned lender Bank Mandiri and financial research-firm Moody’s Analytics, for instance, had expected a reading of 5.91 percent and 6.1 percent, respectively.
“Food prices have weakened, and that muffled inflation in October,” Setianto, undersecretary for distribution and services statistics at BPS, told reporters on Tuesday.
Many food commodities sold at lower prices in October compared to the previous month, with red chili peppers contributing most to the monthly deflation, followed by eggs, poultry, cayenne pepper and cooking oil. Meanwhile, prices of rice and tempeh remained on an upward trend.
The monthly price drop in the food category far outweighed the increase in the transportation category, and the overall monthly deflation seen in October muted annual inflation, BPS explained.
The cooling down of food prices last month saw the volatile food price inflation drop to 7.04 percent yoy from 9.02 percent yoy in the preceding month.
