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Indonesia: Low Inflation Rate Reflects Success in Controlling Price: BI
TEMPO.CO, Jakarta – Bank Indonesia (BI) Governor Agus Martowardojo asserted the low coreinflation and deflation do not necessarily mean low public purchasing power. Instead, the deflation and low core inflation reflect government’s success in controlling prices.
“Core inflation does not necessarily reflect weak purchasing power,” Agus said after a meeting with President Joko Widodo or Jokowi at the Presidential Palace Complex today, September 5.
The Central Statistics Agency announced that the core inflation rate in August was relatively low. The agency recorded that the inflation of core components in the period of January-August 2017 was 2.15 percent, lower than last year’s 2.98 percent. The deflation rate was recorded at 0.07 percent.
Some believe that the deflation and low core inflation rate reflect low purchasing power. Bank Central Asia economist David E. Sumual, for instance, views that the low core inflation rate was not seasonal but due to a stagnated consumption.
BTN chief analyst Winang Budyoyo echoed David’s opinion, as saying that the inflation rate in August 2017 was the lowest over the last 14 years. Winang said that that the low inflation rate reflected a declining public purchasing power.
Source: https://en.tempo.co/read/news/2017/09/05/056906224/Low-Inflation-Rate-Reflects-Success-in-Controlling-Price-BI