BRI Economist Expect Inflation Not To Pass The 5 Percent Level

Illustration. (Photo: Doc. Antara)

JAKARTA - PT Bank Rakyat Indonesia (BRI) economist Anton Hendranata in the Tanya BKF event, hopes that the inflation rate will not exceed the 5 percent level in 2022 when compared to the previous year (year-on-year/yoy).

This optimism is reflected in the latest data trends, where the distance or gap between the Consumer Price Index (CPI) inflation and the Producer Price Index (PPI) is getting smaller.

"The trend gap is getting smaller. So with the existing inflation, namely headline inflation, it seems that price increases at producers have been passed through or transferred to consumers, so hopefully in 2022 inflation can be below 5 percent (yoy) or around approx. 4.5 percent (yoy)," said Anton, quoted from Antara, Tuesday, August 9.

The headline inflation in question is the CPI index which in July 2022 touched a fairly high level, namely 4.94 percent (yoy).

With the transfer of the increase in commodity prices from producers to consumers, he believes that CPI inflation towards the end of the year will not rise too significantly.

Previously, there were concerns that the increase in commodity prices borne by producers had not been transferred to consumers because the increase in CPI inflation was not too large.

However, Anton revealed that this was in fact caused by the large amount of subsidies and compensation for fuel oil (BBM) and energy from the government which totaled IDR 500 trillion this year.

"If indeed the increase in global commodity prices has not been transferred by producers to consumers, then there is a greater probability that year-end inflation could be above the 5 percent level," he said.

Meanwhile, in terms of core inflation, he said the level of 2.86 percent (yoy) in July 2022 really reflects people's purchasing power and inflation expectations.

Thus, it can be seen that core inflation is still moving gradually, namely last year, which was below the level of 2 percent (yoy) and has now reached 2.86 percent (yoy).