Inflation in the US Goes Crazy, Sri Mulyani Plans Its Impact on Indonesia

Minister of Finance Sri Mulyani (Photo: Doc. Antara)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani said that the latest inflation data in the United States as of August 2022 showed a figure of 8.3 percent year on year (yoy). According to him, the level is still relatively high and even beyond the previous target.

"This figure is higher than market expectations," he said in a meeting with the House of Representative's (DPR) Budget Agency (Banggar) on Wednesday, September 14.

According to the Minister of Finance, this trend is believed to make the US central bank, The Federal Reserve (The Fed), more aggressive in reforming monetary policy.

"This high inflation encourages the Fed to be more hawkish in taking monetary steps," she said.

The Minister of Finance added that in this situation, Indonesia needs to be aware of future global conditions. The reason is, the US is one of Indonesia's largest trading partners as well as a major player in the world economy.

Meanwhile, several things that need to be observed in an effort to counteract this impact are the preparation of the 2032 State Budget which is currently being discussed with the DPR.

“This global shock could move in an uncertain direction. We will continue to observe economic growth, inflation, and the rupiah exchange rate in 2023," she said.

Domestically, the last inflation rate in August 2022 was recorded at 4.6 percent yoy. This figure is higher than the government's target of 3 percent plus minus 1 percent.

Meanwhile, Bank Indonesia last month raised its benchmark interest rate from 3.50 percent to 3.75 percent.