Indonesia posted its lowest inflation in almost two decades last month as the COVID-19 outbreak continues to suppress demand. The Consumer Price Index (CPI) rose 2.19% year-on-year. On a sequential basis, the CPI rose 0.07% month-on-month. Transport prices led to the rise (0.87%), followed by health costs (0.27%). Most other major components recorded small increases. The key exception was the food, beverages and tobacco component, which fell by 0.32%.
Statistics bureau chief Suhariyanto said the low rate coincided with the Eid al Fitr, marking the end of Muslim fasting month when consumption usually peaks. “The uncertainty surrounding the economy has made the inflation level very unusual and much lower than last years,” said Suhariyanto, head of Statistics Indonesia (BPS).
As many are aware, the government has implemented large-scale social restrictions, and travel ban to help mitigate the spread of COVID-19 and these policies have contributed to limit demand for commodities, as most people have to stay at home.
Indonesia is now gearing up for reopening the economy, which has been dashed by the virus pandemic. Several regions have ready to resume the economy amid a surge in coronavirus infections, with the government seeking to minimize job losses and the threat of social unrest. The country will need to adjust and cope with the pandemic, which has already put 2 million people out of work in just two months.
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