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Inflation slows as COVID-19 restrictions reduce demand
The country’s consumer price index (CPI) in January fell by 1.55 percent year-on-year, the lowest since November, as income and demand were strained by the health crisis.
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Traders sort fish at the Muara Angke Wholesale Fish Market in North Jakarta on Jan. 23. (JP/Ricky Yudhistira)
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ndonesia’s annual inflation rate slowed in January, after a rally in the last four months, as the country’s ongoing struggle with the COVID-19 pandemic and extended lockdown limited consumers’ purchasing power.
The country’s consumer price index (CPI) in January fell by 1.55 percent year-on-year (yoy), the lowest since November, as income and demand were strained by the health crisis, Statistics Indonesia (BPS) announced on Monday.
The inflation rate was below Bank Indonesia’s (BI) target range of 2 to 4 percent this year. On a month-to-month basis, the CPI rose by 0.26 percent.
January’s inflation was driven by price hikes in volatile commodities, namely cayenne pepper, fresh fish, tempeh and tofu, among other products.
“Going into 2021, we see that the impact of COVID-19 has not subsided and is still casting a shadow on the economy in many countries including Indonesia,” BPS head Suhariyanto said in a virtual presser on Monday.
“During the pandemic, mobility declines [and] the wheels of the economy have slowed down, which has affected income and eventually led to weak demand.”
The government has extended the public activity restrictions (PPKM) in Java and Bali, which began on Jan. 11, to last until Feb 8, as the country’s COVID-19 infection rate passed the 1 million mark in January.
