The Central Statistics Agency (BPS) recorded a 0.07 percent deflation in August 2017. Meanwhile, calendar year inflation (January-August) 2017 reached 2.53 percent, and year-on-year inflation (August 2017 compared to August 2016) was 3.82 percent.
Not only did the overall component experience deflation in August 2017, but the government-regulated goods price component also experienced a 0.48 percent deflation. Similarly, the volatile goods component also saw a 0.87 percent deflation.
This deflation has been cited by some as an indicator of declining purchasing power among the public. This can be seen in the core inflation, which shows a downward trend, further supported by the Bank Indonesia's (BI) 25 basis point cut in the 7-day reserve repo rate to 4.5 percent. The aim is to boost household consumption.
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