Indonesia's Inflation Rose Slightly in August 2023

According to a report by the Central Statistics Agency (BPS), Indonesia experienced a year-on-year (yoy) inflation rate of 3.27% in August 2023.

This rate shows a slight increase compared to July 2023, after five consecutive months of slowdown as seen in the graph above.

Domestic inflation in August 2023 remains within Bank Indonesia (BI)'s target range of 3% to 4% until the end of the year.

"Bank Indonesia believes that inflation will remain under control within the target range of 3.0±1% for the remainder of 2023 and 2.5±1% in 2024," BI stated in its press release on Friday, September 1, 2023.

BPS noted that the commodities contributing significantly to the annual inflation in August 2023 were rice, potatoes, garlic, broiler chicken, chicken eggs, fresh fish, white cigarettes, kretek cigarettes, kretek filter cigarettes, house contracts, house rent, and domestic helper wages.

The August 2023 inflation rate was also influenced by price increases in gasoline, diesel fuel, city transportation fares, intercity transportation fares, train fares, college/university tuition fees, rice with side dishes, and gold jewelry.

Meanwhile, commodities contributing to deflation or a year-on-year price decrease in August 2023 included red chilies, green chilies, chili peppers, tomatoes, white cabbage, shallots, cooking oil, liquid/dish soap, and mobile phones.

Looking at expenditure groups, Indonesia's highest year-on-year inflation in August 2023 occurred in the transportation sector. The details are as follows:

* Transportation: 9.65% (yoy)
* Personal care and other services: 3.76% (yoy)
* Food, beverages, and tobacco: 3.51% (yoy)
* Food and beverage service/restaurants: 2.88% (yoy)
* Health: 2.69% (yoy)
* Household equipment, appliances, and routine maintenance: 2.21% (yoy)
* Education: 2.07% (yoy)
* Recreation, sports, and culture: 1.88% (yoy)
* Housing, water, electricity, and household fuel: 1.40% (yoy)
* Clothing and footwear: 1.12% (yoy)

Only one expenditure group experienced year-on-year deflation in August 2023: the information, communication, and financial services sector, with a deflation of 0.22% (yoy).