BI and Government Strengthen Inflation Control Programme to Face El Niño

Bank Indonesia (BI) together with the Government are strengthening inflation control efforts through the Prosperous Food and Inflation Control Movement (GPIPS), directed at maintaining supply availability and smooth food distribution to anticipate the impact of El Niño. BI Deputy Governor Ricky P. Gozali, in an online press conference following the BI Board of Governors Meeting in Jakarta on Wednesday, explained that GPIPS is implemented through a number of regional programmes. These programmes include the application of good agricultural practices such as providing irrigation facilities, digital farming, post-harvest strengthening including the provision of cold storage, and food downstreaming, particularly for horticultural commodities. In addition, BI and the Government are expanding inter-regional cooperation with a business-to-business (B2B) scheme based on mapping surplus and deficit areas to make food distribution more effective. Other efforts are also being made through the forward-looking optimisation of distribution facilitation and the provision of transport subsidies so that product prices become more affordable. Lastly, GPIPS is also strengthened through the expansion of the Low-Cost Food Movement or market operations carried out with greater precision in terms of commodity, location, and timing. “All these strategies are expected to keep market prices stable. We also see that the movement of volatile food inflation has started to improve and ease, and we will continue to do this in anticipation until the end of the year,” explained Ricky. The GPIPS programme has been launched in the Sumatra and Java regions. It is next scheduled to be launched in the Bali-Nusa Tenggara region on 27 July 2026, followed by Kalimantan and Sulawesi, Maluku, and Papua (Sulampua). According to Ricky, GPIPS not only aims to maintain price stability but also to ensure food availability, preserve people’s purchasing power, and improve welfare. The programme’s implementation is tailored to the challenges in each region, so a uniform approach is not applied to all areas. “Through this GPIPS, Bank Indonesia together with the central and regional governments will always be present with the community in order to maintain price stability,” said Ricky. For information, the Consumer Price Index (CPI) inflation in June 2026 was recorded at 3.34 per cent year-on-year (yoy), a slight increase from 3.08 per cent (yoy) in May, but still within the target range. Meanwhile, volatile food inflation remained relatively high at 5.58 per cent (yoy), mainly driven by rising prices of shallots, garlic, and rice due to declining production in central areas, increased transport costs, and the end of the main harvest season. Ricky explained that based on BI’s monitoring, inflationary pressures were spatially concentrated in Sumatra, Sulawesi-Maluku-Papua (Sulampua), and Kalimantan. The highest volatile food inflation pressures occurred in Sumatra and Sulampua, mainly due to weather factors such as El Niño, which caused the harvest season to end and disrupted food supply and distribution. “To respond to these conditions, BI coordinates with the government through 46 representative offices. We are also implementing GPIPS using the 4K strategy for regional price control, namely price affordability, supply availability, smooth distribution, and effective communication,” said Ricky.