Inflation in March 2022 Is the Highest Since May 2019

inflation rate

Indonesia is being hit by increases in several commodity prices. Most recently, the Central Statistics Agency (BPS) reported that the Consumer Price Index (CPI) in March 2022 experienced inflation of 0.66 percent every month (month-to-month/mtm).

This was conveyed by the Head of the Central Statistics Agency, Margo Yuwono. He said the inflation rate in March 2022 was the highest since May 2019.

“This is the highest inflation since May 2019, when inflation was 0.68 percent mtm,” he said at a press conference, Friday (1/4/2022).

According to Margo, the three biggest contributors to March 2022 inflation were based on expenditure groups, namely food, beverages and tobacco, water, electricity, and household fuel, as well as personal care and other services.

The food, beverage, and tobacco category experienced inflation of 1.47 percent mtm and contributed to the inflation of 0.38 percent.

“The reason is that this group contributed quite a lot in March 2022, the commodity being red chili which contributed 0.10 percent,” he explained.

On an annual basis, BPS noted that inflation in March 2022 reached 2.64 percent (year-on-year/yoy) and in the current year it reached 1.20 percent (year-to-date/YTD).

Of the 90 cities monitored by BPS, as many as 88 cities experienced inflation and 2 cities experienced deflation in March 2022.

The highest inflation occurred in Merauke at 1.86 percent mtm, while the highest deflation occurred in Tuai at -0.27 percent mtm.

On the other hand, this news was also conveyed by Bank Central Asia (BCA). They predict another price increase (inflation) for the Consumer Price Index (CPI) in March 2022, after the CPI in February 2022 recorded deflation of 0.02% mom.

The transmission of the increase in global commodity prices to the domestic inflation rate was also felt in March 2022. This then pushed up import inflation (imported inflation) which could enter through raw goods, including food commodities such as wheat and corn as well as non-food ingredients such as minerals, nickel, and copper.

In April 2022, there could be an increase in inflation due to an increase in the Value Added Tax (VAT) rate to 11%. According to a rough calculation, this increase in VAT could account for an increase of 0.15% to 0.2%.

Meanwhile, in May 2022, inflation is expected to continue to increase in line with seasonal patterns, namely the momentum of Eid al-Fitr which is usually the peak of public consumption.