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Indonesia experiences 0.02% deflation in March

Monday, 03 April 2017 | Sanny Cicilia

JAKARTA. Indonesia experienced deflation of 0.02% in March because of a harvest season that helped push down prices of several major food commodities, bringing annual inflation to 3.63%, the Central Statistics Agency (BPS) reported on Monday.

It was the first deflation this year after the inflation rate of Southeast Asia's largest economy rose 0.97% in January and 0.23% in February.

BPS head Suhariyanto said the deflation in March was a little outside of expectations as Bank Indonesia (BI) previously predicted inflation at 0.05% and several analysts also forecast a low inflation rate.

"Deflation occurred sharply by 0.66% in food commodities, coupled with declining prices by 0.13% in transportation, communications and financial services," he said in a press conference at the BPS headquarters on Monday.

Meanwhile, inflation in March occurred in processed foods, cigarettes, housing, clothing, health, education, sports and other components.

"The relatively sharp decline in food prices helped lower the effects of a previous electricity price adjustment and an increase in prices of certain types of fuel," Suhariyanto added.

The electricity price hike that spiked inflation in January was caused by a cut in government subsidies for 900 volt-ampere (VA) customers. (bbn)

Source : The Jakarta Post

Reporter: Sanny Cicilia
Editor: Sanny Cicilia