Economist Says Inflation Remains Stable Help BI Hold Reference Interest Rates Until The End Of 2024

JAKARTA - The Central Statistics Agency (BPS) noted that there was a deflation in June 2024 of 0.08 percent on a monthly basis or month to month (mtm), a decrease in the consumer price index from 106.37 in May 2024 to 106.38 in June 2024.

This deflation occurs in two consecutive months.

The deflation in June 2024 was higher than in May 2024 when there was a monthly deflation of 0.03 percent.

Meanwhile, on an annual basis, the Consumer Price Index (JCI) generally fell to 2.51 percent year on year (yoy) in June 2024 from 2.84 percent (yoy) in May 2024.

Meanwhile, inflation for the calendar year or year to date (ytd) for the first half of 2024 was recorded at 1.07 percent, lower than inflation (ytd) 1.37 percent which was recorded in the first half of 2023.

Head of Bank Permata economist, Josua Pardede, said that moderate inflation will support Bank Indonesia (BI) to maintain the current interest rate amid increasing global uncertainty.

"Given that general inflation and core inflation remain stable within the target range, inflationary pressures are not expected to be too high. This provides sufficient flexibility for BI to maintain or even lower policy interest rates in the future," he said in his statement, Tuesday, July 2.

According to Josua, amid high global uncertainty, putting pressure on the stability of the Rupiah and imported inflation, as well as anticipating space for the Federal Funds Rate (FFR) decline in December 2024,

"We expect the BI-rate to remain at the level of 6.25 percent by the end of 2024. We expect BI to start cutting the BI-rate in the first quarter of 2025," he said.