Gold Jewelry Drives October Inflation in Indonesia, Ending Five-Month Deflation Trend
Fri Nov 01 2024
Rising gold jewelry prices became the main driver of Indonesia's inflation in October 2024, recording an increase of 0.08 percent from September. The domestic price hike aligns with the upward trend in international gold prices, breaking a deflation streak that began in May.
Year-on-year, inflation reached 1.71 percent, with a year-to-date increase of 0.81 percent, according to Acting Head of Statistics Indonesia (BPS) Amalia A. Widyasanti.
"Gold jewelry, part of the personal care and other services category, was the top contributor to October’s inflation with a 0.06 percent share," Amalia announced at a press conference at BPS headquarters in Jakarta on Friday.
Amalia explained that this year’s gold price movements differ from previous years. Historically, gold jewelry experienced deflation five times in 2022 and three times in 2023. However, since September 2023, it has continued to show inflationary growth, peaking in October 2024.
Global gold price increases have been driven by economic uncertainty and heightened demand for safe assets amid market volatility.
Other commodities contributing to October’s inflation included broiler chicken (0.04 percent), shallots (0.03 percent), tomatoes (0.02 percent), rice (0.02 percent), and ground coffee (0.02 percent). Cooking oil, machine-rolled clove cigarettes, and chicken eggs each contributed 0.01 percent.
Bank Danamon economist Hosianna Evalita Situmorang commented that, under current conditions, deflation is unlikely to reoccur due to a lack of significant price-reducing factors. She emphasized the need for government policies to maintain consumer purchasing power, which would support inflation stability.
"With inflation at low levels, government policy should focus on boosting purchasing power and providing stimulus, especially in labor-intensive sectors," she added.
Source: https://jakartaglobe.id/