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Jakarta Post

Indonesia records lowest inflation in history as purchasing power deteriorates further

  • Adrian Wail Akhlas

    The Jakarta Post

PREMIUM
Jakarta   /   Mon, January 4, 2021   /  06:25 pm
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Shoppers buy fresh chili at Peunayong traditional market in Aceh on Feb. 3, 2020. (Antara/Irwansyah Putra)

Indonesia recorded the lowest annual inflation in the country’s history in 2020 as the coronavirus pandemic ravaged the economy and battered purchasing power. The country’s annual consumer price index (CPI) stood at 1.68 percent last year as prices advanced 0.45 percent on a monthly basis in December, Statistics Indonesia (BPS) announced on Monday.  The figure is the lowest full year number in history and below Bank Indonesia’s (BI) target range of 2 to 4 percent last year. While a low inflation rate is good for an economy as it means consumers can buy goods and services at affordable prices, the low figure in Indonesia last year indicates weakening purchasing power rather than balanced supply and demand.   Annual core inflation, which excludes volatile food and government administered prices, fell for nine consecutive months last year up to December ...