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Core inflation slows as emergency curbs hit demand
Statistics Indonesia (BPS) has reported annual core inflation of 1.40 percent for July, lower than in the preceding month and a year earlier. Month-to-month (mtm), however, core inflation was the largest contributor to the overall rise in consumer prices.
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A seller rests at a market in Kulon Progo regency, Yogyakarta, in this undated photo. (JP/R. Berto Wedhatama)
C
ore inflation in Indonesia slowed in July as a large part of the country was put under tighter emergency COVID-19 restrictions, indicating that the latest measures weakened consumer demand.
Statistics Indonesia (BPS) reported annual core inflation of 1.40 percent for July, lower than in the previous month and a year earlier. On a month-to-month (mtm) basis, however, core inflation was the largest contributor to a general increase in consumer prices.
Overall, the Consumer Price Index (CPI) rose 1.52 percent year-on-year (yoy) and 0.08 percent mtm in July.
“If we look at [product categories], the drivers of core inflation included medicines and prescription [medication],” BPS head Margo Yuwono told reporters in an online briefing on Monday. “Meanwhile, declining gold prices held back core inflation.”
The core inflation indicator disregards types of foodstuff with generally volatile prices, for example, due to variable harvests, as well as goods and services for which the government sets prices, such as subsidized fuel.
The former, volatile food, posted a 2.97 percent annual increase, while government-administered prices were up only 0.61 percent yoy.
The government imposed emergency pandemic restrictions in early July to forestall a further rise in infections and deaths following a rapid increase in cases driven by the more transmissible Delta variant of the coronavirus. The measures were later extended to early August.
