LPEM INFLATION ANALYSIS IN JULI 2016

Central Bureau of Statistics (BPS) records (general) inflation of 0,69% (mtm) or 3,21% (yoy) in July 2016. BPS data shows that July 2016 inflation is the lowest during this last five years. All expenditure groups shows general price increase. Highest price increases occur in food, transport & communication and financial services expenditure groups. These incidences happen due to moslem’s ramadhan festivities coincidence with the month of July 2016, where intra-transportation flow and food consumption is at its peak. By examining data of inflation source from six main commodities, four of them have price increases (shallot, chicken meat, fish and rice). Egg price is decreasing during this month.

Apart from the low inflation in July 2016, inflation level is relatively higher compare to LPEM FEBUI’s previous forecast. This higher inflation is mainly due to price increases of transportation, communication, and financial sector. Government regulations also play a key roles in influencing price increase in these three expenditure groups.

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