Heaptalk, Jakarta — Indonesian Statistics (BPS) reported that Indonesia’s inflation rate December 2024 contracted to 1.57%, demonstrating a significant decline from the previous year which attained 2.61%.
“The inflation target range of Indonesian authority is plus minus 1 out of 2.5. So, the lower limit is 1.5%. Thus, annual inflation in December 2024 remains within the government’s inflation range and tends to be at the lowest threshold,” said Pudji Ismarti, Deputy for Statistics and Services at BPS.
As cited in the BPS report, the two biggest contributors to inflation are gold and cigarettes. Gold jewelry and machine-made clove cigarettes (PMK) contributed 11 times of the inflation respectively.
“Gold jewelry is a core component that contributes 0.35% to inflation in 2024,” said Pudji Ismarti.
Meanwhile, PMK contributes 0.13 percent of inflation in 2024. BPS, even, noted that the 2024 inflation is the lowest inflation rate since 1958 or since inflation calculations were carried out. The 2024 inflation rate also managed to beat the country’s previous lowest inflation rate in 2020 which reached 1.68% yoy.
Apart from low inflation, the Indonesian Manufacturing Purchasing Managers’ Index (PMI) is reported at an expansive level of 51.2 after previously being at a contractionary level.
Responding to the low inflation rate and rise in PMI, the Coordinating Minister for Economic Affairs, Airlangga Hartanto, stated that this condition reflects the positive outlook for the world manufacturing sector with many companies preparing to face increased demand in 2025.
Airlangga also believes that inflation and PMI will be maintained if the business world remains optimistic about national economic conditions.
