Indonesia's Inflation Rate Eases to 2.88 Percent in July

Indonesia's inflation rate cooled down in July, despite high global oil prices putting pressure on the economy. The consumer price index (CPI) growth slowed to 2.88 percent year-on-year (yoy), according to Statistics Indonesia (BPS). This is well within the government's and Bank Indonesia's (BI) target range of 2.5 plus/minus 1 percent.

The main drivers of inflation in July were food, beverages, and tobacco; transportation; and personal care and other services. The food group recorded a yoy inflation rate of 2.97 percent due to price increases for fresh fish, cooking oil, rice, cigarettes, and other goods. Transportation registered the highest inflation reading at 5.12 percent yoy, mainly due to costlier gasoline, airfares, cars, motorbikes, and engine lubricants.

Core inflation, which BI defines as the persistent component within inflation movements influenced by economic fundamentals rather than government decisions or seasonal supply shocks, was recorded at 2.76 percent yoy.