Indonesia continues to be hit by inflationary storms. After last April, several commodity prices rose sharply, it turns out that inflation is continuing in May. Several reasons, such as food prices and airfares, have resulted in continued inflation.
Based on the Price Monitoring Survey by Bank Indonesia (BI) in the second week of May 2022, inflation was 0.48% (mtm). Thus, the inflation forecast for May 2022 is 2.65% (YTD) on a calendar year basis, and 3.64% (YoY) on an annual basis.
BI noted that the main contributors to inflation from May 2022 to week II were broiler meat and air transportation at 0.08% (mtm), chicken eggs, and inter-city transportation each at 0.04% (mtm).
Then beef was 0.02% (mtm), wet shrimp, coconut, oranges, mustard greens, kale, tempeh, raw tofu, and bottled water, each was 0.01% (mtm).
This is because from the beginning of May to the second week, the Eid holiday period saw an increase in demand for meat and air transportation for going home. Plus the increase in the price of airline tickets is due to the increase in aviation fuel.
However, some commodities experienced a decline in prices during this period. Namely cooking oil and cayenne pepper – each by -0.01 percent (mtm).
The price of simple packaged cooking oil and premium packaging did experience a price drop because now the price has been submitted to the market mechanism. So the price can go down and up according to market conditions.
Previously, Bank Indonesia (BI) predicted that there would be a decrease in inflation in May 2022. However, if some commodity prices still do not fall, this May inflation will continue as in April.
Going forward, BI will continue to strengthen coordination with the government and relevant authorities to continue to drive economic growth amidst mounting external pressures, as well as continue to optimize the policy mix strategy to maintain macroeconomic and financial system stability to support further economic recovery.