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Slight increase in October inflation rate indicates healthy purchasing power: Economists
Year-on-year (yoy) inflation was 3.13 percent last month, lower than the average yoy October inflation of 3.35 percent from 2016 to 2018
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A vendor piles red chilies at Idi Rayeuk Market in East Aceh on Sept.4. Deflation in the price of volatile foods in October was caused partially by declining red chill prices, Statistics Indonesia (BPS) reported on Friday. (Antara/Syifa Yulinnas)
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slight increase in the monthly inflation in October indicates the government’s success in maintaining the price stability and also shows the people’s healthy purchasing power, economists have said.
The monthly inflation rate was 0.02 percent in October, a change in direction from September’s 0.27 percent deflation. The year-to-date (ytd) inflation rate has remained at September’s level of 2.2 percent, while the year-on-year (yoy) inflation rate stands at 3.13 percent, lower than the average yoy October inflation rate of 3.35 percent recorded from 2016 to 2018, Statistics Indonesia (BPS) head Suhariyanto announced on Nov. 1.
The agency said October’s core inflation rate was 0.17 percent, while administered prices and volatile food prices grew 0.03 percent and fell 0.47 percent, respectively. Core inflation is a measurement of the change of the prices of goods and services, but it excludes changes in volatile food and energy prices.
“A hike in the prices of rice, prepared food, filtered cigarettes and white cigarettes contributed to last month’s inflation,” Suhariyanto said in Jakarta.
Price hikes in healthcare, education, recreation and sports have also contributed to October’s inflation rate. The core inflation rate surpassed the volatile food inflation rate during the month.
A drop in the prices of red chili (due to a recent harvest), eggs, fish, potatoes and garlic was the chief cause of deflation in volatile food prices, Suhariyanto said.
Bank Central Asia economist David Sumual said low food prices were caused by price normalization after the Idul Fitri holiday -- when food and transportation prices usually increase -- and low inflation in imported goods due to the rise of the rupiah against the US dollar.
