Martin Bagya Kertiyasa, Jakarta – Indonesia's annual inflation accelerated to 3.34% in June, while monthly inflation rose to 0.44%, driven largely by higher non-subsidized fuel prices and increased airfares during the school holiday season, the country's statistics agency said on Wednesday.

Data from the Statistics Indonesia showed the Consumer Price Index (CPI) rose from 111.40 in May to 111.89 in June, with monthly inflation quickening from 0.28% in May.

"Transportation was the biggest contributor to June's monthly inflation, led by gasoline, which accounted for 0.21 percentage points of headline inflation. Airfares contributed 0.05 percentage points, while engine lubricants added 0.01 percentage points," BPS Deputy for Distribution and Services Statistics Ateng Hartono told a press conference in Jakarta on Wednesday.

Ateng attributed the rise in gasoline prices to adjustments in non-subsidized fuel prices on June 1 and June 10. On June 1, Pertamax Turbo prices increased by Rp 850, or around 4%, while Dexlite and Pertamina Dex prices were cut by about 12% and 11%, respectively. On June 10, the price of Pertamax surged by Rp 4,050, or roughly 32%.

Higher airfares also contributed to inflation as demand for domestic travel increased during the June school holidays.

On an annual basis, gold jewelry was the single largest contributor to inflation, accounting for 0.61 percentage points of the 3.34% year-on-year reading.

However, Ateng said gold jewelry had only a marginal impact on monthly inflation, contributing 0.01 percentage points, while also registering a slight price decline in parts of the month.

Inflation was recorded across all major spending categories. Food, beverages and tobacco posted annual inflation of 4.67%, while transportation rose 4.57%. Personal care and other services recorded the highest increase among expenditure groups at 10.10%.

Other major contributors to annual inflation included fresh fish, rice, cooking oil, red chili, chicken meat, bird's eye chili, shallots, beef, oranges, cigarettes, household fuel, house rents, gasoline, airfares, mobile phones, university tuition fees and prepared meals.

Meanwhile, commodities that helped moderate annual inflation included chicken eggs, coconuts, garlic, long beans, pork, cucumbers, powdered detergent, fabric softener and senior high school tuition fees.

For June's monthly inflation, key price increases came from shallots, garlic, rice, carrots, fresh fish, cooking oil, red chili, beef, bird's eye chili, gasoline, airfares, engine lubricants and mobile phones. Monthly deflationary pressures came from chicken meat, chicken eggs, mustard greens, cucumbers and gold jewelry.

Source: https://jakartaglobe.id/business/june-inflation-climbs-to-334-as-fuel-price-hikes-drive-cost