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Jakarta Post

Record-low inflation sparks worry over household spending

  • Marchio Irfan Gorbiano

    The Jakarta Post

Jakarta   /   Fri, January 3, 2020   /  10:27 am
The Jakarta Post Image
Economic value: A buyer purchases a product from a vendor at Poncol Market, Central Jakarta, in this undated photo.(JP/Narabeto Korohama)

Indonesia’s decade-low inflation rate has sparked concern among several economists that the key indicator foreshadows a further weakening of the national economy. The consumer price index (CPI) rose just 2.72 percent in 2019, the lowest full-year rate since 2012, which is when Statistics Indonesia began recording the index with the current methodology in 82 selected cities. On a longer timescale, last year’s inflation is the lowest since 1999, when the CPI increased by 2.13 percent. “[Looking at the data], I conclude that, first, prices were under control, secondly, administered prices had little impact on headline inflation and third, we do need to be extra-careful with this slowing [core] inflation,” BPS head Suhariyanto told a press conference in Jakarta on Thursday. Administered prices only rose by 0.51 percent in 2019, a far cry from the 3.36 perc...