Statistics Indonesia’s (BPS) consumer price index (CPI) was up by 1.54 percent year-on-year (yoy) in July, below Bank Indonesia’s (BI) target range of between 2 and 4 percent for the year. It was also lower than June’s annual inflation rate of 1.96 percent.

Meanwhile, the core annual inflation rate stood at 2.07 percent, as government-administered prices were up 0.70 percent and volatile prices only rose by 0.35 percent yoy.

“The core inflation was still weak despite a slight [monthly] increase in July, which suggests that we still have to work hard to boost people’s purchasing power,” BPS head Suhariyanto said in a virtual briefing on Monday.

The government gradually restarted economic activities in July to accelerate the recovery of the country’s economy, which has been badly hit by the pandemic. It has also earmarked Rp 695.2 trillion (US$47.2 billion) in stimulus measures to strengthen the country’s healthcare response and boost the economy amid the ongoing health crisis.

However, the government expects the country’s gross domestic product (GDP) to have contracted by 3.8 percent in the second quarter and possibly shrinking further in the third, which would mark Indonesia’s first recession since the 1998 financial crisis.

Read also: Indonesia’s inflation falls to 20-year low as consumer spending weakens

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