Indonesia Inflation Rate: June

𝐉𝐮𝐧𝐞’𝐬 𝐌𝐨𝐧𝐭𝐡-𝐨𝐧-𝐌𝐨𝐧𝐭𝐡 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐫𝐩𝐫𝐢𝐬𝐞

𝑱𝒖𝒏𝒆’𝒔 𝑯𝒆𝒂𝒅𝒍𝒊𝒏𝒆 𝑰𝒏𝒇𝒍𝒂𝒕𝒊𝒐𝒏 𝒓𝒂𝒕𝒆𝒔

 Indonesia headline inflation rate for the month of June was released today at  0.61% MoM (May:0.4%, April:0.95%) and 4.35% YoY (May:3.55%, April:3.47%).  The annual inflation rate is in-line with market consensus, although at the high range of the estimate.  However, the monthly June’s rate of 0.61% is almost twice higher than that of market expectation.

𝑭𝒐𝒐𝒅, 𝑩𝒆𝒗𝒆𝒓𝒂𝒈𝒆𝒔, 𝒂𝒏𝒅 𝑻𝒐𝒃𝒂𝒄𝒄𝒐

The Consumer Price Index (CPI) of the Food, beverages, and tobacco component increased the highest of 1.77% MoM in June (May:0.78%, April:1.76%). This component  contributed the highest, of 0.47ppt (May:0.2ppt, April:0.46ppt) to June headline inflation rate. On an annual basis, the CPI increased for the Food, beverages, and tobacco component grew by 8.26% (May:5.62%, April:5.2%).

𝑻𝒓𝒂𝒏𝒔𝒑𝒐𝒓𝒕𝒂𝒕𝒊𝒐𝒏

The CPI of Transportation component increased by 0.3% MoM in June (May:0.65%, April: 2.42%) and is the second biggest contributor to June’s headline inflation rate, at 0.04ppt (May: 0.08ppt, April:0.3ppt).  Annually, the CPI increase for Transportation component in June is at 5.45% (May:4.77%, April:4.84%).

𝑭𝒐𝒐𝒅 𝒂𝒏𝒅 𝑩𝒆𝒗𝒆𝒓𝒂𝒈𝒆𝒔 / 𝑫𝒊𝒏𝒆-𝒐𝒖𝒕

 The   CPI of Food and beverages / Restaurants component rose by  0.33% MoM in June (May: 0.54%, April: 0.55%) and is the third biggest contributor to June’s headline inflation rate at 0.03ppt. Annualy the CPI for Food and beverages / Restaurants component rose by 3.67% in June (May:3.57%, April: 3.47%).

𝐕𝐨𝐥𝐚𝐭𝐢𝐥𝐞 𝐚𝐧𝐝 𝐍𝐨𝐧-𝐯𝐨𝐥𝐚𝐭𝐢𝐥𝐞 𝐅𝐨𝐨𝐝 𝐂𝐨𝐦𝐩𝐨𝐧𝐞𝐧𝐭

 The CPI of Volatile food component increased by 2.51% MoM in June (May:0.94%, April:2.3%), and by 10.07% on an annual basis (May:6.05%, April: 5.48%). In the last three months, Volatile food component contributed the most to headline inflation rates, at 0.44ppt, 0,16ppt and0.39ppt, respectively.

At the other end, Non-volatile or Core food component increased by 0.19% MoM in June (May: 2.58%, April: 2.6%), while on an annual basis rose by 2.63% (May:2.58%, April: 2.3%).

𝐑𝐞𝐦𝐚𝐫𝐤

Higher energy prices and commodity prices in addition to worldwide supply chain hiccups to fulfill  pent-up demand in the post-COVID 19 relaxing measures have been special challenge for many countries including Indonesia, to manage the supply side of goods and services.  The challenge has been exacerbated by the invasion of Russia to Ukraine.

It is about to be seen  whether the on-going turmoil in Volatile food component prices to become persistent and to affect Indonesia Core inflation in the near term.

As for today, the JCI seemed to  overreact on the release, to have recorded an intra-day low of 6,777pt or a significant 2.0% lower than the previous close.

Cheers,