Indonesia's Inflation Slows Again in June 2023, Entering BI's Target Range

According to a report by the Central Bureau of Statistics (BPS), Indonesia experienced 3.52% year-on-year (yoy) inflation in June 2023. The rate continued to slow since March 2023, marking the lowest inflation rate since the beginning of the year.

Domestic inflation is now within Bank Indonesia's (BI) target range of 3% to 4% for 2023.

BPS noted that the commodities contributing significantly to annual inflation in June 2023 were rice, garlic, chicken eggs, chicken meat, fresh fish, white cigarettes, kretek cigarettes, and kretek filter cigarettes.

June 2023's inflation rate was also influenced by price increases in housing contracts, house rent, household fuel, electricity tariffs, domestic helper wages, car prices, gasoline, diesel, intercity transportation fares, city transportation fares, tuition fees, and gold jewelry.

Conversely, commodities contributing to deflation (year-on-year price decrease) in June 2023 included red chilies, chili peppers, shallots, tomatoes, green chilies, spinach, white cabbage, cooking oil, and mobile phones.

Considering expenditure groups, June 2023 saw the highest inflation in the transportation sector. The details are as follows:

* Transportation: 10.18% (yoy)
* Personal care and other services: 4.27% (yoy)
* Food and beverage service/restaurants: 3.27% (yoy)
* Food, beverages, and tobacco: 2.85% (yoy)
* Education: 2.75% (yoy)
* Health: 2.58% (yoy)
* Household equipment, appliances, and routine maintenance: 2.57% (yoy)
* Housing, water, electricity, and household fuel: 2.49% (yoy)
* Recreation, sports, and culture: 2.17% (yoy)
* Clothing and footwear: 1.47% (yoy)

Only one expenditure group experienced year-on-year deflation in June 2023: information, communication, and financial services, with a deflation of 0.23% (yoy).