Bank Mandiri Estimates Inflation At The End Of 2024 At Level 2.78 Percent

JAKARTA - Bank Mandiri's economic research team estimates that inflation at the end of 2024 will be at the level of 2.78 percent or above inflation in 2023 which is 2.61 percent.

"Inflation is still within the range of Bank Indonesia's target of 1.5 percent to 3.5 percent this year," said Bank Mandiri Senior Economist Reny Eka Putri, quoted from Antara, Wednesday, September 4.

Reny said inflation in 2024 is projected to grow slightly higher than in 2023 because commodity and food prices had increased after experiencing pressure due to geopolitical conflicts and the risk of imported inflation.

Based on data from the Central Statistics Agency (BPS), the consumer price index (IHK) experienced a deflation of 0.03 percent month on month (mom) in August 2024.

According to Reny, this realization is lower than market expectations with inflation of 0.00 percent (mom), but higher than July 2024 which recorded deflation of 0.18 percent (mom).

The low inflation in August 2024 was influenced by deflation in the food, beverage and tobacco group by 0.52 percent (mom) and information, communication, and financial services groups that experienced deflation by 0.02 percent (mom).

Meanwhile, the highest inflation occurred in the education group which grew by 0.65 percent (mom) in August-24 to coincide with the new school year.

On an annual basis, inflation was recorded at 2.12 percent (yoy), higher than market expectations of 2.10 percent (yoy), but below the July 2024 inflation of 2.13 percent (yoy).

Previously, Bank Indonesia (BI) strengthened synergy and supported efforts to control regional inflation through the National Food Inflation Control Movement to realize national price stability and food security.

"We need to strengthen coordination and synergy in controlling inflation in maintaining price stability and building food security in order to mitigate the risk of inflation in the future, especially in terms of supply, namely production disruptions due to natural disasters and seasonal factors and distribution constraints," said BI Senior Deputy Governor Destry Damayanti in Jakarta, Friday (17/5/2024).

For this reason, Destry said that end-to-end food inflation control innovations or from upstream to downstream must be optimized simultaneously to increase productivity on the upstream side and encourage the expansion of distribution coverage on the downstream side.

In the future, Bank Indonesia believes inflation will remain under control in the 2.5 plus minus one percent target range in 2024 and 2025.