Bank Indonesia said the countrys inflation on monthly basis was 0.74 percent in July , 2016 bringing the total inflation to 1.8 percent in the first seven months of the year. The monthly inflation rose from 0.66 percent in June but the trend was declining during the month of July, Bank Indonesia Governor Agus Martowardojo.
Agus said the inflationary pressure declined sharply in the last two weeks of July from 1 percent in the third week to 0.74 percent in fourth week. In the first week the inflation was 1.2 percent down to 1.18 percent in the second week of the month, he said here on Friday (29/7/2016).
"The consumer goods prices fell resulting in a decline in inflation from 1 percent in third week to 0.74 percent at present," Agus said.
However, inflationary pressure is still feared in the remaining days of July with the surge in the prices of food commodities like red onion and chili, he said. Therefore, he called on the government and the Regional Inflation Controlling Team to remain watchful.
He predicted the countrys inflation this year would be around 3.6 percent or still inside the central banks target range of 3-5 percent or below the governments target of 4 percent this year. The central bank predicted the inflationary pressure would come again when the wet dry season or La Nina that could cause trouble in distribution of goods.
In addition, normally the price trend would rise toward the end of the year and Christmas, he said. Inflation is an macro economic indicators which the central bank is more concern with to maintain economic stability. Other indicators are current account deficit which is expected to relax to 2.2 percent of the Gross Domestic Product or around US$20 billion.
The central bank still maintain its moderate target of 5-5.4 percent for the countrys economic growth this year. (Ant)