Listen! This Is Bank Indonesia's Prediction For Next Year's Inflation

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) said that the current rising inflation was due to high supply-side pressures in line with rising world commodity prices and supply disruptions.

BI Governor Perry Warjiyo even revealed that the domestic inflation rate could reach 4.6 percent by the end of the year. This figure means that it has exceeded the target set for 2022, which is 3 percent plus minus 1 percent.

However, Perry is optimistic that the inflation rate will return to a sloping level next year and is believed to be within the target range.

“CPI inflation (consumer price index) in 2022 is estimated to be higher than the upper limit of the target. Inflation will return to the target of 3 percent plus minus 1 percent in 2023," he said when giving a press statement via an online channel on Thursday, July 21.

Perry explained that the CPI in June 2022 recorded inflation of 0.61 percent (mtm). On an annual basis, CPI inflation in June 2022 was recorded at 4.35 percent (yoy), or higher than inflation in the previous month of 3.55 percent (yoy).

"Core inflation was maintained at 2.63 percent (yoy) supported by the consistency of Bank Indonesia's policies in maintaining inflation expectations," he said.

Meanwhile, inflation in the volatile foods category increased, mainly influenced by rising global food prices and disruptions in supply due to weather.

Inflation in the administered prices category also remained high, influenced by inflation in air transport and energy.

"Going forward, CPI inflationary pressure is expected to increase, driven by rising global food and energy prices," he said.

"Bank Indonesia will continue to strengthen policy coordination with the Government through the Central and Regional Inflation Control Teams (TPIP and TPID)," concluded BI Governor Perry Warjiyo.