2-9-2024 (JAKARTA) Indonesia’s consumer prices remained largely stable in August, with the annual inflation rate registering at 2.12%, according to official data released on Monday. This figure represents a marginal decrease from July’s 2.13% and sits comfortably within Bank Indonesia’s target range, meeting analysts’ forecasts.
The August inflation reading marks the lowest level since February 2022, reflecting the country’s success in maintaining price stability. Bank Indonesia (BI), the nation’s central bank, has set a target range of 1.5% to 3.5% for inflation, and the latest figures indicate that economic managers have effectively kept price pressures in check.
While headline inflation showed a slight dip, the core inflation rate – which excludes volatile food and energy prices – inched up to 2.02% in August from 1.95% in July. This uptick marginally surpassed market expectations of 1.98%, suggesting some underlying inflationary pressures persist in Southeast Asia’s largest economy.
Indonesia has managed to keep inflation within the central bank’s target range since mid-2022, a feat that demonstrates the effectiveness of BI’s monetary policy. Despite this achievement, the central bank has maintained relatively high interest rates, prioritising the stability of the rupiah currency and safeguarding against global market volatility.
BI Governor Perry Warjiyo has emphasised that currency stability remains the focal point of monetary policy for the current quarter. However, he has also hinted at the possibility of easing monetary policy in the coming quarter to stimulate economic growth, provided that external conditions remain favourable.
