Due to Food and Cigarette Prices, January Inflation Reaches 5.28%

Indonesian Traditional Market

The Central Statistics Agency (BPS) has just released Indonesia’s inflation data for January 2023. BPS noted that last month’s inflation reached 5.28 percent (year on year/yoy). This figure increased from 5.51 percent yoy in December 2022. Food and cigarette prices are still the main contributors to the January inflation rate.

In addition, the Head of BPS Margo Yuwono said that monthly inflation reached 0.34 percent. He said inflation occurred due to increases in the prices of various basic commodities such as food, beverages, and tobacco.

Meanwhile, he added, Wednesday (1/2), the group that contributes to deflation is transportation. On a month-to-month basis, the largest contribution came from rice, red chilies, fresh fish, bird’s eye chilies, and filter clove cigarettes.

According to him, of the commodities contributing to inflation, the largest was in the food, beverage, and tobacco group, namely 0.16 percent with a share of 0.3 percent.

By province, on a month-to-month basis, inflation occurred in 80 cities while 10 other cities experienced deflation. The highest inflation occurred on the island of Sumatra in Gunungsitoli City with 1.87 percent.

Then, in Kalimantan, the highest was in Singkawang City at 0.45 percent.

Then, the highest inflation in Java was in Cirebon at 1.17 percent. Inflation in Bali, Nusa Tenggara, was highest in Waingapu at 1.16 percent.

Furthermore, the highest inflation in Sulawesi was in Luwuk at 0.74 percent. Then, in Maluku and Papua, the highest inflation was in Sorong at 0.96 percent.

Furthermore, the price component regulated by the government experienced inflation of 12.28 percent yoy, or lower than December 2022 which was 13.34 percent, and made the biggest contribution to January 2023 inflation, which was 2.17 percent.

Furthermore, the volatile price component experienced inflation of 5.71 percent, or higher than in December 2022 which was 5.61 percent, and contributed 0.97 percent to January inflation.

On the other hand, the inflation rate has shown positive signs after leaving its peak in various countries. However, the International Monetary Fund (IMF) warned that this decline still needs to be monitored.

The IMF stated that world economic growth will still be overshadowed by uncertainty this year.

The decline in inflation in various countries was also supported by the central bank monetary policy which was getting tighter by raising interest rates.