JAKARTA – The spike in domestic inflation seems unavoidable. The latest indication came from the monetary authority of Bank Indonesia (BI) which stated that this year's projections were above all the targets that had been set previously.
BI Governor Perry Warjiyo said that his party expects core inflation to rise above 4 percent. In fact, core inflation is one of the main references for the central bank in setting the benchmark interest rate because it reflects the demand from the public.
"We estimate core inflation in 2022 to reach 4.15 percent," he said when answering reporters' questions on Tuesday, August 23.
According to VOI records, Bank Indonesia's core inflation target is 2.99 percent. This information was conveyed by Perry when responding to a report from the Central Statistics Agency (BPS) which released data for July 2022 with core inflation of 2.86 percent and inflation based on the consumer price index (CPI) of 4.94 percent.
This is also believed to be BI's benchmark in maintaining the benchmark interest rate fixed at 3.50 percent last month because the core inflation target has not been achieved.
Furthermore, for CPI inflation, the monetary authority is aiming for around 4.9 percent in 2022. However, with the current situation, BI is starting to be realistic that this amount will also be exceeded.
“With this development (core inflation), CPI inflation could be 5.24 percent. Of course in the future we will update these estimates in line with the policies that will be taken by the government, "said Perry.
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