DIGIVESTASI - The Central Bureau of Statistics (BPS) reported that the monthly inflation rate in December 2023 was 0.41% or the consumer price index rose from 116.08 in November 2023 to 116.56. Therefore, Indonesia's inflation rate is expected to reach an annualized rate of 2.61% by the end of 2023 and 2.61% since the beginning of the year.

"The graph shows that December's monthly inflation rate is the highest in 2023," said Acting. Head of BPS Amalia Adinger Widyasanti during a press conference on Tuesday (2024/02/01). Food, beverages and tobacco contributed the most with an inflation rate of 1.07% and an inflation rate of 0.29%.

Inflation products in this group include red chili with an inflation contribution of 0.66%, followed by shallots 0.64%, tomatoes 0.03%, cayenne pepper 0.02%, rice 0.02%, and eggs 0.02%. In addition, there are also other product groups outside the food, beverage, and tobacco group that contribute considerable inflation, such as air transportation by 0.05%, gold jewelry by 0.02%, and recreation prices by 0.01%.

"In general, 85 out of 90 cities included in the CPI experienced inflation, 33 cities experienced inflation above the national level, while five other cities experienced deflation, all in Sumatra," he said. Previously, Bloomberg's consensus of economists predicted annual inflation would average 2.82% (y/y) by December 2023.

Of the 22 economists recognized by Bloomberg, Gareth Leather from Capital Economics scored the highest among 20 economists. His forecast is 3.9% (YoY). Meanwhile, the lowest prediction of 2.59% was delivered by Mika Martinpal from PT Bank CIMB Niaga Tbk. David Sumual, chief economist of PT Bank Central Asia Tbk (BBCA), expects inflation to slow down to 2.72% in December from 2.86% in the previous month. He said that the slowdown in inflation is consistent with the decline in food and oil prices due to the continued appreciation of the exchange rate.

"The inflation trend continues to slow down. Food inflation is quite low. In addition, oil prices fell and the exchange rate also increased," he told Bisnis, Monday (1/1/2024). Meanwhile, Josua Pardede, Chief Economist of Permata Bank, estimates that annual inflation will be slightly below the consensus average of 2.81%. Josua expects price inflation, particularly food price fluctuations, will continue to be the main driver of overall inflation.

"Our forecast is that annual inflation in December 2023 will be below the median target of 3% or 2.81% year-on-year," he said. Joshua expects core inflation to decline to 1.83% on November 23 from 1.87% year-on-year. However, on a monthly basis, core inflation is expected to increase from 0.12% to 0.17% month-on-month, reflecting increased demand related to the year-end holidays.