Jakarta, Indonesia Sentinel — Indonesia’s Consumer Price Index (CPI) inflation reached a historic low of 1.57% year-on-year (YoY) in 2024, marking the lowest annual inflation rate since records began in 1958.
Pudji Ismartini, Deputy for Distribution and Services Statistics at Indonesia’s Central Bureau of Statistics (BPS), attributed the record-low inflation to declining prices of staple foods during the first half of 2024.
“This is the lowest inflation rate since the first inflation indicator was calculated in 1958,” Pudji stated on Friday, January 3, 2025. “The low inflation in 2024 is largely due to falling prices of basic food commodities.”
Inflation Within Government Targets
Pudji noted that the annual inflation rate for December 2024 remains within the government’s target range, hovering near the lower limit of the 2.5% ± 1% target.
Airlangga Hartarto, Coordinating Minister for Economic Affairs, emphasized that the government successfully maintained inflation within its target range. Core inflation rose slightly by 0.17% month-on-month (MoM) and 2.26% YoY, reflecting overall price stability.
“Despite some increases in key commodities like rice, shallots, garlic, and broiler chicken, annual volatile food (VF) inflation decreased,” Airlangga said. “Collaboration between the government and Bank Indonesia (BI) through the National and Regional Inflation Control Teams (TPIP and TPID) has effectively stabilized prices, supporting sustainable economic growth.”
Collaboration for Stability
The lower inflation rate in 2024 compared to the 2.61% YoY inflation in 2023 highlights the success of Indonesia’s monetary and fiscal policies. BI credits this achievement to its monetary consistency and close collaboration with government authorities.
Through initiatives such as the National Movement for Food Inflation Control (GNPIP), BI and government agencies have worked to stabilize food prices across various regions.
Ramdan Denny Prakoso, Head of BI’s Communication Department, expressed confidence in maintaining controlled inflation in the coming years.
“Moving forward, Bank Indonesia expects inflation to remain within the target range of 2.5% ± 1% for 2025 and 2026,” he stated.
Food Commodities and Economic Growth
While overall inflation declined, certain food commodities still experienced price hikes. Airlangga emphasized that ensuring sufficient food supplies, stabilizing prices, and revitalizing critical sectors such as manufacturing, construction, and agriculture remain key priorities for the government.
“The government will continue to ensure adequate food supplies and price stability while fostering recovery in vital economic sectors,” he added.
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Long-Term Outlook
The record-low inflation offers a strong foundation for Indonesia’s economic growth. It underscores the effectiveness of collaborative efforts between the government and BI, ensuring price stability while supporting economic resilience.
By maintaining inflation within target levels, Indonesia positions itself for sustainable development in the coming years, bolstered by robust policy coordination and proactive measures in key sectors.
(Becky)
