Indonesia’s inflation rate in July dropped to the lowest level since 2000 as the COVID-19 pandemic ravages people’s purchasing power, according to Statistics Indonesia’s (BPS).

People practice social distancing while buying vegetables amid the COVID-19 outbreak in Depok, West Java, on April 28. (Source: Reuters)

The country’s consumer price index (CPI) was up by 1.54 percent year-on-year in July, below Bank Indonesia’s (BI) target range of between 2 and 4 percent. It was also lower than June’s inflation rate of 1.96 percent.

Meanwhile, the core inflation rate stood at 2.07 percent, as government-administered prices were up 0.70 percent and volatile prices only rose by 0.35 percent year-on-year.

BPS head Suhariyanto said the core inflation was still weak and the Government still has to work hard to boost people’s purchasing power.

The Southeast Asian country gradually restarted economic activities in July to accelerate the recovery of its economy, which has been badly hit by the pandemic.

The Indonesian government has also earmarked 695.2 trillion Rp (about 47.2 billion USD) for stimulus measures to strengthen the country’s health care response and boost the economy amid the ongoing health crisis.

However, it predicted the country’s gross domestic product (GDP) to have contracted by 3.8 percent in the second quarter and possibly shrinking further in the third, which would mark Indonesia’s first recession since the 1998 financial crisis.

Source: VNA