Target Correction, Bank Mandiri Economist Projects Indonesia's Inflation To Reach 3 Percent By The End Of The Year

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Mandiri Chief Economist Andry Asmoro revised Indonesia's inflation estimate which was originally estimated at 3.6 percent to 3 percent-3.2 percent at the end of 2023.

According to him, the inflation rate is a game changer that supports the growth and stability of the financial sector.

Andry said that if inflation is more under control even though the challenge of el nino can increase the potential for food supply disruptions.

Meanwhile, inflation until July was recorded at 3.08 percent yoy, and has returned to the Bank Indonesia target in the range of 2 to 4 percent.

Whereas previously, inflation in June 2023 had touched 3.52 percent.

"OurROWcasting shows that Indonesia's inflation rate can be in a 3 to 3.2 percent stretch by the end of 2023 with a good food supply management strategy," Andry said in Bank Mandiri's Media Gathering & Macroeconomic Outlook presentation, Tuesday, August 22.

On the other hand, Andry continued, Indonesia's trade balance performance still recorded a surplus even though the trade surplus continued to show a decline as commodity prices normalized and also increased imports in line with domestic economic recovery.

"With the performance of the trade balance, we estimate that the Working Transaction Balance (NTB) or Current Account Balance will again record a deficit of 0.65 percent of GDP in 2023," Andry continued.

In addition, data showed during the first seven months of 2023, the trade balance surplus was recorded at US$21.2 billion, a decrease compared to the surplus in the same period last year of 29.1 billion US dollars.

"Seeing the improving trend of Indonesia's economic growth, we believe economic growth can reach 5.04 percent in 2023," he concluded.