May 2018 inflation remains controlled : BI

Jakarta (ANTARA News) – The Consumer Price Index (CPI) inflation in May 2018 remains controlled or within the targeted range of 3.5?1 per cent (year-on-year).

“CPI inflation in May 2018 stands at 0.21 percent (month-to-month), increasing compared to that in the previous month of 0.10 per cent (mtm) as Ramadan was approaching,” the Executive director of the central banks communication department, Agusman, said in a statement here on Thursday .

Despite the increase, CPI inflation in May 2018 was lower than the average CPI inflation during Ramadan in the previous four years of 0.63 per cent (mtm).

This months CPI increase was boosted by the rise in all inflation components according to the seasonal pattern, said Bank Indonesia. With such a development, until May CPI inflation had reached 1.30 per cent (ytd) or 3.23 per cent (yoy), lower than the previous months inflation of 3.41 per cent.

The controlled CPI inflation was backed by the stable core inflation. Core inflation stood at 0.21 per cent (mtm), higher than the previous months 0.19 per cent, but lower than the average core inflation during Ramadan in the previous four years of 0.32 per cent (mtm).

The main commodities contributing to the core inflation were beverages and apparel during Ramadan. Annually, core inflation stood at 2.75 per cent (yoy), higher than the previous months 2.69 per cent.

The controlled core inflation until May 2018 was closely related to the policies adopted by Bank Indonesia in directing the inflation expectation, including keeping the movement of exchange rate according to its fundamentals, the BI statement said.

Volatile food price in May 2018 underwent inflation, but it was lower than the historic volatile food inflation during Ramadan. Volatile food inflation hit 0.19 per cent (mtm) after deflation of 0.29 per cent (mtm) in the previous month.

The inflation was in line with the start of Ramadan in the second week of May 2018, although lower than the volatile food inflation of 1.59 per cent during Ramadan in the previous four years.

Volatile food inflation was primarily attributable to imported-breed chicken and eggs. Meanwhile, shallots, garlic, rice, and cayenne pepper recorded deflation in line with their stable supply.

Annually, volatile food inflation was recorded at 4.33 per cent (yoy), lower than the previous month?s 5.08 per cent (yoy).

Inflation of administered prices came from airfares that rose with the holidays approaching. Inflation of administered prices in May 2018 reached 0.27 per cent, slightly higher than that in the previous month of 0.24 per cent.

Annually, inflation of administered prices stood at 3.61 per cent (yoy), lower than that in the previous month of 4.04 per cent (yoy).

Going forward, it was predicted that inflation would remain within the targeted range of 3.5?1 per cent (yoy).

Policy coordination between the Government and Bank Indonesia in inflation control would consistently be strengthened, primarily in anticipation of the increasing volatile food inflation, said BI.

Source: ANTARA News