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Indonesia records first deflation since August 2023: BPS

Jakarta Globe - June 3, 2024

Arnoldus Kristianus, Vinnilya, Jakarta – The Central Statistics Agency (BPS) reported a deflation of 0.03 percent in May 2024, marking the first deflation since August 2023.

Meanwhile, the year-on-year inflation stood at 2.84 percent, and the year-to-date inflation was at 1.16 percent, within the government's target range between 1.5 percent and 3.5 percent.

"This May 2024 deflation is the first occurrence since August 2023," said Acting Head of BPS Amalia Adininggar Widyasanti during a press conference in Jakarta on Monday.

Breaking down expenditure groups, food, beverages, and tobacco were the main contributors to deflation, with a decrease of 0.03 percent and a total deflation contribution of 0.08 percent.

The leading deflation-contributing commodities were rice (0.15 percent), chicken meat, and fresh fish (0.03 percent each), along with tomatoes and bird's eye chili (0.02 percent each).

Additionally, transportation commodities experienced deflation of 0.36 percent, with a contribution to deflation of 0.04 percent.

"The commodities contributing to deflation include intercity transportation fares (0.03 percent), air transportation fares (0.02 percent), and train fares (0.01 percent)," added Amalia.

Spatially, out of the 38 monitored provinces, 24 experienced inflation while 14 experienced deflation, with South Papua experiencing the highest inflation at 2 percent and the deepest deflation occurring in Banten at 0.52 percent.

Looking at components, deflation resulted from regulated government price components and volatile price components. Regulated government price components experienced deflation of 0.13 percent, with a contribution to deflation of 0.02 percent. Meanwhile, core components experienced inflation of 0.17 percent, with a contribution to inflation of 0.11 percent.

According to Sucor Sekuritas analyst, Danika Augusta Sari, Indonesia's inflation is low compared to global inflation rates, as expected by the market. "The consensus for future inflation is a decrease to 2.94 percent, while core inflation is expected to rise to 1.88 percent," explained Danika.

Source: https://jakartaglobe.id/business/indonesia-records-first-deflation-since-august-2023-bp