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Annual inflation hits post-COVID low as prices fall for fifth straight month
September data show that the annual inflation rate eased to 1.84 percent, primarily driven by falling food prices due to increased supply following the recent harvest season, with analysts forecasting 25 bps cuts to the BI-Rate in both November and December.
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Vegetable vendor Suradji awaits customers at his stall in Paseban Market in Central Jakarta, in this file photo from February 2020. (JP/Dzulfiqar Fathur Rahman)
C
onsumer prices in Indonesia fell for the fifth month in a row, growing at the slowest annual pace in years, official data show on Tuesday, which analysts believe will give more room for Bank Indonesia (BI) to cut its benchmark rate again by the year-end.
The headline consumer price index (CPI) dipped 0.12 percent month-to-month (mtm) in September to 105.93 points, marking the steepest decline since 2020, interim Statistics Indonesia (BPS) head Amalia Adininggar Widyasanti said on Tuesday.
The CPI has declined for five consecutive months since April, driven by falling fresh food prices. Red chilies, chicken eggs, poultry meat and tomatoes were among the commodities that saw notable price decreases due to increased supply from farms.
Other factors included easing monthly pressure from a hike in school fees.
“The September index drop is primarily due to lower production costs on food and livestock and ample supply from the harvest season,” Amalia said.
Annual inflation eased from 2.12 percent in August to 1.84 percent in September, the lowest rate since November 2021 but still within the inflation range of 1.5-3.5 percent targeted by Bank Indonesia (BI).
